UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Rule 14a-101
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934
Filed by the Registrant x
Filed by a Party other than the Registrant ¨
Check the appropriate box:
| x | Preliminary Proxy Statement |
| ¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e) (2)) |
| ¨ | Definitive Proxy Statement |
| ¨ | Definitive Additional Materials |
| ¨ | Soliciting Material Under §240.14a -12 |
IDEANOMICS, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| x | No fee required. |
| ¨ | Fee paid previously with preliminary materials. |
| ¨ | Fee computed on table below per Exchange Act Rules 14a-6(i) (4) and 0-11. |
IDEANOMICS, INC
, 2023
Dear Stockholder:
You are invited to attend Ideanomics, Inc.’s
(the “Company”) Annual Meeting of Stockholders on , 2023, at 10:00 AM, local time (New York Time). The Annual Meeting
will be held in a virtual meeting format only, via live webcast on the Internet, with no physical in-person meeting. You will be able
to attend and participate in the Annual Meeting online by visiting www.virtualstockholdermeeting.com/IDEX2023, where you will
be able to listen to the meeting live, submit questions, and vote. We encourage you to vote your shares prior to the Annual Meeting.
Details of the business to be conducted at the Annual Meeting
are included in the attached Notice of Annual Meeting of Stockholders and Proxy Statement.
Whether or not you plan to attend the
virtual Annual Meeting, your vote is important and you are encouraged to vote promptly. If you received a paper copy of the proxy card
by mail, you may sign, date, and return the proxy card in the enclosed envelope. If you attend the Annual Meeting, you may revoke your
proxy and vote at the virtual Annual Meeting.
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Very truly yours, |
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Alfred P. Poor |
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Chief Executive Officer |
IDEANOMICS, INC.
1441 Broadway, Suite 5116
New York, NY 10018
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON , 2023
TO THE STOCKHOLDERS OF IDEANOMICS, INC.:
You are cordially invited
to attend the Annual Meeting of Stockholders of Ideanomics, Inc., a Nevada corporation (the “Company”), to be held on
, 2023, at 10:00 AM, local time (New York Time). The Annual Meeting will be held in a virtual meeting format only, via live
webcast on the Internet, with no physical in-person meeting. You will be able to attend and participate in the Annual Meeting online
by visiting www.virtualstockholdermeeting.com/IDEX2023, where you will be able to listen to the meeting live, submit questions, and vote.
We encourage you to vote your shares prior to the Annual Meeting.
The agenda of the Annual Meeting will be the following items
of business, which are more fully described in the accompanying proxy statement (the “Proxy Statement”):
| 1. | Elect the five directors named in the
attached Proxy Statement to serve for a one-year term to expire at the 2024 Annual Meeting
of Stockholders or until their respective successors are duly elected and qualified, as follows:
five directors, including Alfred P. Poor, Shane McMahon, James Cassano, Andrea Hayward and
Paul Hancock to be elected by the holders of the Company’s Common Stock and Series A,
Series B, and Series C Preferred Stock, voting together as a single class; |
| 2. | Ratify the appointment of Grassi & Co., CPAs, P.C. (“Grassi”) as the independent registered accounting firm of
the Company for the fiscal year ending December 31, 2023; |
| 3. | Approval of the amendment and restatement of our 2010 Equity Incentive Plan, a copy of such amended and restated plan is included
as Appendix A to this proxy statement (the “Plan”), to increase the number of shares authorized for issuance under
the Plan to 37,500,00; |
| 4. | Approval of the issuance of common shares as the underlying conversion of preferred Series C shares
accordance with Nasdaq Rules Rule 5635(d); |
| 5. | Approval of the issuance of securities
in one or more non-public offerings where the maximum discount at which securities will be
offered will be equivalent to a discount of 20% below the market price of our shares of Common
Stock, or such lower amount as permitted by Nasdaq, in accordance with Nasdaq Listing Rules 5635(b) and
5635(d); |
| 6. | To approve the amendment of the Company’s Second Amended and Restated Certificate of Incorporation to increase the total number
of shares of the Company’s authorized common stock and preferred stock; |
| 7. | To approve the potential issuance of
more than 20% of the Company’s outstanding shares of common stock to Yorkville Advisors
upon the conversion of the Debenture(s) and preferred stock that were issued in financing
transactions, and in accordance with the stockholder approval requirement of Nasdaq Listing
Rules 5635(b) and 5635(d). |
| 8. | Approval of the adjournment of the Annual
Meeting, if necessary or advisable, to solicit additional proxies in favor of the foregoing
proposals if there are not sufficient votes to approve the foregoing proposals; and |
| 9. | Transact such other business as may
properly come before the meeting or any adjournment or postponement thereof. |
The Annual Meeting will be a completely virtual
meeting of stockholders. To listen to the Annual Meeting or submit questions or vote during the Annual Meeting via live webcast, please
visit www.virtualstockholdermeeting.com/IDEX2023. You will not be able to attend the Annual Meeting in person.
This notice of meeting, Proxy Statement, proxy
card, and copy of the Annual Report for the year ended December 31, 2022 (“Annual Report”) are being distributed to
stockholders on or about , 2023. The foregoing items of business are more fully described in the attached Proxy Statement. Stockholders
of record at the close of business on , 2023, the record date, are entitled to notice of and to vote at the annual meeting and any adjournment
thereof.
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BY ORDER OF THE BOARD OF DIRECTORS |
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Alfred P. Poor |
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Chief Executive Officer |
IMPORTANT NOTICE REGARDING THE AVAILABILITY
OF PROXY MATERIAL
FOR THE ANNUAL MEETING
TO BE HELD ON , 2023
The Notice of Meeting, Proxy Statement, Proxy
Card and Annual Report are available on the internet at:
www.proxyvote.com
IDEANOMICS, INC.
PROXY STATEMENT
2023 ANNUAL MEETING OF STOCKHOLDERS
The enclosed proxy is solicited on behalf
of the Board of Directors (the “Board”) of Ideanomics, Inc., a Nevada corporation (“we,” “us,”
the “Company” or “Ideanomics”), for use at the Annual Meeting of Stockholders to be held on , 2023,
at 10:00, AM, local time (New York Time). In light of the COVID-19 pandemic, to support the health and well-being of our stockholders,
employees, and directors, and taking into account recent federal, state, and local guidance, the Annual Meeting will be held in a virtual
meeting format only, via live webcast on the Internet, with no physical in-person meeting. You will be able to attend and participate
in the Annual Meeting online by visiting www.virtualstockholdermeeting.com/IDEX2023, where you will be able to listen to the meeting
live, submit questions, and vote. We encourage you to vote your shares prior to the Annual Meeting. Our telephone number at our principal
executive offices is (212) 206-1216.
INFORMATION CONCERNING SOLICITATION AND VOTING
Record Date and Share Ownership
Stockholders of record
at the close of business on , 2023, which date is referred to herein as the record date, are entitled to notice of and to
vote at the Annual Meeting. As of the record date: 11,993,615 shares of our common stock, par value $0.001 per share (“Common Stock”)
were issued and outstanding and held of record by approximately 734 stockholders of record, with each of those shares being
entitled to one (1) vote; 7,000,000 shares of our Series A preferred stock, par value $0.001 per share (“Series A
Preferred Stock”) were issued and outstanding and held of record by one (1) stockholder of record, with the holder thereof
being entitled to ten (10) votes for each share of Common Stock that is issuable upon conversion of a share of Series A Preferred
Stock; 2,150,000 shares of our Series B preferred stock, par value $0.001 per share (“Series B Preferred Stock”)
were issued and outstanding and held of record by 1 stockholders of record, with the holder thereof being entitled to one (1) vote
for each share of Common Stock that is issuable upon conversion of a share of Series B Preferred Stock; and 1,159,276 shares of
our Series C preferred stock, par value $0.001 per share (“Series C Preferred Stock”) were issued and outstanding
and held of record by 343 stockholders of record, with the holder thereof being entitled to one (1) vote for each share
of Common Stock that is issuable upon conversion of a share of Series C Preferred Stock.
A list of these stockholders
will be available for inspection during ordinary business hours at our offices located at 1441 Broadway, Suite 5116, New York, NY
10018, for at least ten (10) days prior to the Annual Meeting. The list will also be available for inspection during the Annual Meeting.
Effects of abstentions and Broker Non-Votes
An abstention represents a
stockholder’s affirmative choice to decline to vote on a proposal. Under Nevada law, abstentions are considered present and entitled
to vote at the Annual Meeting and will be counted towards the quorum requirement. However, abstentions are not counted and will not impact
the outcome of the votes on any of the proposals.
If you are a beneficial
owner of shares held in “street name” and do not provide the organization that holds your shares with specific voting instructions,
under the rules of various national and regional securities exchanges, the organization that holds your shares may generally vote
on routine matters but cannot vote on non-routine matters. If the organization that holds your shares does not receive instructions from
you on how to vote your shares on a non-routine matter, the organization that holds your shares does not have the authority to vote on
the matter with respect to those shares. This is generally referred to as a “broker non-vote.” Proposal Nos. 2 and 8 are
considered “routine” items under the relevant securities exchange rules. The “routine” treatment of these proposals
does not affect the seriousness with which we treat it. All other proposals involve matters that are considered “non-routine.”
We encourage you to provide voting instructions to the organization that holds your shares by carefully following the instructions provided
by such organization.
Voting, Solicitation and Revocability of Proxy
If you are a stockholder of record, you may vote online at
the virtual Annual Meeting.
If you will not be attending
the virtual Annual Meeting, you may vote by proxy. You may vote by proxy over the Internet, over the telephone or by mail. The procedures
for voting by proxy are as follows:
| · | To vote by proxy over the Internet go to the web address listed on the proxy card; or |
| · | To vote by proxy over the telephone, dial the toll-free phone number listed on proxy card under the heading “Vote by Phone”
and following the recorded instructions; or |
| · | To vote by mail, mark, sign, and date your proxy card and return it in the postage-paid envelope we have provided or return it to
Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
If your shares are held in the name of a bank,
broker, or other nominee, follow the voting instructions on the form you receive from our bank, broker, or other nominee.
In order to ensure that your vote is counted,
please submit your proxy card, properly signed, and the shares represented will be voted in accordance with your directions. You can specify
your choices by marking the appropriate boxes on the proxy card. If your proxy card is submitted without specifying choices, the shares
will be voted in line with the Board’s recommendation for Proposals 1 through 9.
You may revoke your proxy
at any time before it is voted at the Annual Meeting by executing a later-voted proxy by mail, by voting by ballot at the Annual Meeting,
or by providing written notice of the revocation to our Secretary at our principal executive offices.
IMPORTANT: All stockholders
are cordially invited to attend the virtual Annual Meeting. To assure your representation at the Annual Meeting, you are urged to vote
your shares by proxy in accordance with the instructions included on the proxy card. Any stockholder attending the virtual Annual Meeting
may vote even if he or she submitted a proxy. However, if a stockholder’s shares are held of record by a broker, bank, or other
nominee and the stockholder wishes to vote at the Annual Meeting, the stockholder must obtain from the record holder a proxy issued in
his or her name.
Your vote is important.
Accordingly, regardless of whether you plan to attend the Annual Meeting, you are urged to vote by proxy in accordance with the instructions
included on the proxy card.
Attendance at the Annual
Meeting is generally limited to our stockholders and their authorized representatives. Any stockholder may listen to the Annual Meeting
via live webcast at www.virtualstockholdermeeting.com/IDEX2023. The webcast will begin on , 2023 10:00 AM, local time (New
York Time). To enter the meeting, please have your 16-digit control number, which is available on your proxy card or voting instruction
form. If you do not have your 16-digit control number please contact your bank, brokerage firm, or follow the instructions on how to
participate at www.virtualstockholdermeeting.com/IDEX2023. On the day of the Annual Meeting, if you encounter any difficulties
accessing the live webcast of the Annual Meeting or during the Annual Meeting, please call the technical support number that will be
posted on the log-in page for our virtual Annual Meeting for assistance.
If you do attend, you may
vote by ballot at the Annual Meeting, thereby canceling any proxy previously given. However, attendance at the Annual Meeting will not
revoke a proxy unless you actually vote at the virtual Annual Meeting.
In the event that any matter
not described in this Proxy Statement properly comes before the Annual Meeting, the proxy holders named in the accompanying proxy will
vote the shares represented by the proxy in their discretion. As of the date of this Proxy Statement, we are not aware of any other matter
that might be presented at the Annual Meeting.
The presence at the virtual
Annual Meeting or by proxy of the holders of thirty-three and one-third percent (33 1/3%) of the shares issued and outstanding and entitled
to vote shall be necessary and sufficient to constitute a quorum for the transaction of business except as otherwise provided by law,
by the Articles of Incorporation, or Bylaws. If, however, such quorum shall not be present or represented at any meeting of the stockholders,
the chair of the meeting or the stockholders entitled to vote thereat, present in person, or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.
If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. At such adjourned meeting at which
a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally
notified.
Assuming a quorum is present,
under Nevada law, our Articles of Incorporation, as amended, (the “Articles of Incorporation”) and our Second Amended and
Restated Bylaws, as amended (the “Bylaws”), with respect to Proposal No. 1, directors are to be elected by a plurality
of the votes of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the election of directors.
This means that for Proposal No. 1, the five (5) candidates receiving the highest number of affirmative votes of the issued
and outstanding Common Stock and Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, voting
together as a single class on an as-converted basis at the Annual Meeting. Only shares that are voted in favor of a particular nominee
will be counted toward that nominee’s achievement of a plurality. Shares present at the Annual Meeting that are not voted for a
particular nominee or shares present by proxy where the stockholder properly withheld authority to vote for such nominee will not be counted
toward that nominee’s achievement of a plurality.
Assuming a quorum is present,
under Nevada law, our Articles of Incorporation, and our Bylaws, with respect to Proposal No. 2 through 6, to approve each of such
proposals, the number of votes cast in favor of such proposal need to exceed the number of votes cast in opposition of such proposal.
Under current NYSE rules regulating
banks, brokers, or other nominees and under applicable rules of the U.S. Securities and Exchange Commission or the Commission, brokers,
banks, or other nominees that have not received voting instructions from a customer may only vote the customer’s shares in discretion
of the bank, broker or other nominee on proposals regarding “routine” matters, which in most cases includes the ratification
of the appointment of the independent registered public accounting firm. However, without your specific instructions, your bank, broker,
or other nominee may not vote your shares in the election of directors.
The entire cost of soliciting
proxies on behalf of the Board, including the costs of preparing, assembling, printing, and mailing this Proxy Statement, the proxy card,
and any additional soliciting materials furnished to stockholders by, or on behalf of, the Company, will be borne by the Company. The
Company has agreed to pay Morrow Sodali a fee of $22,500 plus associated disbursements and other variable costs. The Company will reimburse
Morrow Sodali for reasonable out-of-pocket expenses and will indemnify Morrow Sodali and its affiliates against certain customary claims,
liabilities, losses, damages, and expenses. Copies of the Company’s solicitation material will be furnished to banks, brokerage
houses, dealers, voting trustees, their respective nominees, and other agents holding shares in their names, which are beneficially owned
by others, so that they may forward such solicitation material, including our Annual Report, to beneficial owners. In addition, if asked,
the Company will reimburse these persons for their reasonable expenses in forwarding these materials to the beneficial owners.
MATTERS TO BE CONSIDERED AT
THE ANNUAL MEETING
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
General
Our Board consists of one
class of directors, which together currently include five members: Alfred P. Poor, Shane McMahon, James S. Cassano, Andrea Hayward, and
Paul Hancock. Effective upon the Annual Meeting, our board will consist of five (5) members. Each director serves from the date of
his election until the end of his term and until his successor is elected and qualified.
Each of the directors listed above have been nominated as
candidates for election as directors, as follows:
Proposal 1: Five directors, including Alfred P. Poor,
Shane McMahon, James S. Cassano, Andrea Hayward, and Paul Hancock to be elected by the holders of the Company’s Common Stock and
Series A , B, and C Preferred Stock, voting together as a single class.
If elected, the directors
will hold office until the next Annual Meeting and until their respective successor is elected and qualified. Unless authority is withheld,
the proxies solicited by the board of directors will be voted “FOR” the election of each nominee. Information regarding
each director nominee is set forth above under the caption “DIRECTORS AND EXECUTIVE OFFICERS.” In case a nominee becomes unavailable
for election to the board of directors, an event that is not anticipated, the persons named as proxies, or their substitutes, will have
full discretion and authority to vote or refrain from voting for any other candidate in accordance with their judgment.
The following paragraphs set forth information regarding
the current ages, positions, and business experience of the nominees.
Board Nominees
Alfred P. Poor
Director Since: December 2018 Age: 53
Our Chief Executive Officer
is a former Chief Operating Officer at Global Data Sentinel, a cybersecurity company that specializes in identity management, file access
control, protected sharing, reporting and tracking, AI and thread response, and backup and recovery. He is the former President and Chief
Operating Officer of Agendize Services Inc., a company with an integrated suite of applications that help businesses generate higher quality
leads and improve business efficiency and customer engagement. Mr. Poor is a client-focused and profitability-driven management executive
with a track record of success at both rapidly-growing technology companies and large, multi-national, organizations.
In light of our business and
structure, Mr. Poor’s extensive executive experience and his educational background led us to the conclusion that he should
serve as a director of our Company.
Shane McMahon
Director Since: July 2010 Age: 53
Mr. McMahon was appointed
Executive Chairman as of July 23, 2021. He was Vice Chairman from January 12, 2016 to the date of his appointment as Executive
Chairman and was our Chairman from July 2010 to January 2016. Prior to joining us, from 2000 to December 31, 2009, Mr. McMahon
served in various executive level positions with World Wrestling Entertainment, Inc. (NYSE: WWE). Mr. McMahon also sits on the
Boards of Directors of International Sports Management (USA) Inc., a Delaware corporation, and Global Power of Literacy, a New York not-for-profit
corporation.
Mr. McMahon has significant marketing and
promotion experience and has been instrumental in exploiting content programming on a global basis. In light of our business and structure,
Mr. McMahon’s extensive executive and industry experience led us to the conclusion that he should serve as a director of our
Company.
James S. Cassano
Director Since: January 2008 Age: 77
Mr. Cassano was appointed
Vice Chairman of the Company effective as of July 23, 2021 and has been a director since January 11, 2008. From December 2009
through December 2021, Mr. Cassano served as a Partner and Chief Financial Officer of CoActive Health Solutions, LLC, a worldwide
contract research organization, supporting the pharmaceutical and biotechnology industries. From February 2005 to December 2009
Mr. Cassano served as a General Partner of Jaguar Capital Partners, a private equity firm he co-founded, focused on investments in
financial payments, electronic media and entertainment. During this period, Mr. Cassano served as executive vice president, chief
financial officer, secretary, and director of Jaguar Acquisition Corporation a Delaware corporation (OTCBB: JGAC), a blank check company,
from its formation in June 2005. through its acquisition of three cable television companies in the People’s Republic of China
in 2007. In June 1998, Mr. Cassano founded New Forum Publishers, an electronic publisher of educational material for secondary
schools, and served as its chairman of the Board and chief executive officer until it was sold to Apex Learning, Inc., a company
controlled by Warburg Pincus, in August 2003. He remained with Apex until November 2003 in transition as vice president business
development and served as a consultant to the company through February 2004. In June 1995, Mr. Cassano co-founded Advantix, Inc.,
an electronic ticketing software and transaction services company providing ticketing services to venues throughout the United States,
the UK and Europe, serving as chairman and chief executive officer. Advantix was subsequently renamed Tickets.com and went public through
an IPO in 1999. From March 1987 to June 1995, Mr. Cassano served as senior vice president and chief financial officer of
the Hill Group, Inc., a privately-held engineering and consulting organization, and from February 1986 to March 1987, Mr. Cassano
served as vice president of investments and acquisitions for Safeguard Scientifics, Inc., a public venture development company. From
May 1973 to February 1986, Mr. Cassano served as partner and director of Strategic Management Services (Europe) for the
strategy and organization practice area of Hay Associates. Mr. Cassano received a B.S. in Aeronautics and Astronautics from Purdue
University and an M.B.A. from Wharton Graduate School at the University of Pennsylvania.
Mr. Cassano has significant senior management experience, including
service as chief executive officer, executive vice president, chief financial officer, secretary, and director. In light of our business
and structure, Mr. Cassano’s extensive executive experience and his educational background led us to the conclusion that he
should serve as a director of our Company.
Andrea Hayward
Director Since: May 2023 Age: 56
On April 18,
2023, Ideanomics, Inc. appointed Andrea Hayward as an independent director of the Company and as a member of the Audit Committee
and Compensation Committee of the board, to be effective as of May 15, 2023. Ms. Hayward worked for over 31 years at United
Parcel Service, where she has delivered specialized supply chain and logistics services on a global scale. Most recently, she served as
Vice President of U.S. Network and Vice President of Transportation Technology, where she led over 8,000 employees with a business unit
P&L of $1.5 billion. She served as a board member of the Quad County Urban League in Aurora Illinois, providing strategic direction
and operational oversight to an organization that supports economic development and social equity for those who are disadvantaged. Additionally,
she is a former academic advisor for the supply chain department at Governors State University in University Park, Illinois. Other
activities included UPS leadership committees - leading their Seasonality Committee and serving as a member of their Women in Operations,
Advanced Technology, and Emergency Crisis committees. Ms. Hayward begins her service as an independent director of the Company on
May 15, 2023.
Paul Hancock
Director Since: September 2023 Age: 46
On August 24, 2023, the board of directors appointed
Paul Hancock as an independent director of the Company and as a member of the Audit Committee and Compensation Committee of the board,
to be effective as of September 1, 2023. Most recently, Mr. Hancock has served as Vice President, Deputy CEO & CFO
of InoBat AS, a company that specializes in the research, development, production, recycling, and final disposal of custom-designed innovative
electric batteries, and he has over 25 years of experience in corporate finance, financial control and strategic planning. From March 2016
to June 2021, Mr. Hancock previously held the position of Deputy Chief Financial Officer at Aston Martin Lagonda, the Iconic
British manufacturer of luxury sports cars. Before that, Paul held various director positions at Doncaster Group, a leading international
manufacturer of high-precision alloy components. Paul has served as Head of Finance at Ricardo, global engineering, environmental and
strategic consultancy and has also worked as a Management Consultant at both Deloitte and IBM. Paul holds a Bachelor of Science Degree
in Mathematics, Statistics and Computing and is a member of the Chartered Institute of Management Accountant.
Except as noted above, the
above persons do not hold any other directorships in any company with a class of securities registered pursuant to Section 12 of
the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act.
Our Board is responsible for
supervision of the overall affairs of the Company.
There are no family relationships
between any of the executive officers and directors.
Vote Required
Directors are elected by a plurality of the votes
cast in person or by proxy at the annual meeting of stockholders and entitled to vote on the election of directors. “Plurality”
means that the nominees receiving the greatest number of affirmative votes will be elected as directors, up to the number of directors
to be chosen at the meeting. Broker non-votes will not affect the outcome of the election of directors because brokers do not have
discretion to cast votes on this proposal without instruction from the beneficial owner of the shares.
Recommendation of Our Board
Our Board recommends that the Company’s stockholders
vote FOR the election of each nominee listed in Proposal No. 1 above.
PROPOSAL NO. 2:
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
General
BF Borgers CPA PC (“BFB”)
was our independent registered public accounting firm for the year ended December 31, 2020. On September 24, 2021, that firm
was dismissed. The dismissal of BFB was approved by our Audit Committee. BDO USA, LLP (“BDO”) was appointed our independent
registered public accounting firm on September 24, 2021.
During the fiscal years ended
December 31, 2020 and 2019 and in the subsequent interim period through September 24, 2021, there were no “disagreements”
(as defined in Item 304(a)(1)(iv) of Regulation S-K and related instructions) with BFB on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to the satisfaction of
BFB would have caused BFB to make reference thereto in its reports on the consolidated financial statements for such years. During the
fiscal years ended December 31, 2020 and 2019 and through September 24, 2021, there have been no “reportable events”
(as defined in Item 304(a)(1)(v) of Regulation S-K).
The reports by BFB on the
Company’s consolidated financial statements for the fiscal years ended December 31, 2020 and 2019 did not contain an adverse
opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. For the
year ended December 31, 2019, BFB’s report included a report on the effectiveness of the Company’s internal control over
financial reporting.
On September 24, 2021,
the Company engaged BDO as the Company’s new independent registered public accounting firm, effective immediately, to perform independent
audit services for the fiscal year ending December 31, 2021. The decision to appoint BDO was approved by the Audit Committee. During
the fiscal years ended December 31, 2020 and 2019 and through September 24, 2021, neither the Company, nor anyone on its behalf,
consulted BDO regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered with respect to the consolidated financial statements of the Company and no written
report or oral advice was provided to the Company by BDO that was an important factor considered by the Company in reaching a decision
as to any accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a “disagreement”
(as defined in Item 304(a)(1) (iv) of Regulation S-K and the related instructions) or a “reportable event” (as that
term is defined in Item 304(a)(1)(v) of Regulation S-K).
On July 21, 2022, the
Company dismissed BDO. The dismissal of BDO was approved by the Audit Committee of the Board. BDO did not issue an audit report on the
Company’s financial statements for the fiscal year ended December 31, 2021. The Company was advised by BDO of certain events
reportable in accordance with Item 304(a)(1)(v) of Regulation S-K in BDO’s letter dated August 4, 2022 (“BDO’s
Letter”). A copy of BDO’s Letter is filed as Exhibit 16.1 to the Company’s Current Report on Form 8-K filed
with the SEC on August 8, 2022..
On July 27, 2022, the
Company engaged Grassi as the Company’s new independent registered public accounting firm, effective immediately, to perform independent
audit services for the fiscal year ended December 31, 2022. The decision to appoint Grassi was approved by the Audit Committee. During
the fiscal years ended December 31, 2021 and 2020 and through July 27, 2022, neither the Company, nor anyone on its behalf,
consulted Grassi regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered with respect to the consolidated financial statements of the Company, and no written
report or oral advice was provided to the Company by Grassi that was an important factor considered by the Company in reaching a decision
as to any accounting, auditing, or financial reporting issue; or (ii) any matter that was the subject of a “disagreement”
(as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a “reportable event” (as that term
is defined in Item 304(a)(1)(v) of Regulation S-K).
Stockholder ratification of
the appointment of Grassi as our independent registered public accounting firm for the fiscal year ending December 31, 2023 is not
required by our Bylaws or otherwise; however, our Board is submitting the appointment of Grassi to our stockholders for ratification as
a matter of good corporate practice. If our stockholders fail to ratify the appointment, our Audit Committee and our Board will reconsider
whether or not to retain Grassi. Even if the appointment is ratified, our Board in its discretion may direct the appointment of a different
independent registered public accounting firm at any time during the year if it determines that such change would be in the best interests
of us and our stockholders.
A representative of Grassi
is expected to attend the Annual Meeting with the opportunity to make a statement if he or she desires to do so and/or respond to appropriate
questions from stockholders present at the meeting.
Independent Auditor’s Fees
The following is a summary
of the fees billed to the Company by its principal accountants for professional services rendered for the years ended December 31,
2022 and 2021 (in thousands):
| | |
Year ended December 31, | |
| | |
2022 | | |
2021 | |
| Audit Fees: | |
| | | |
| | |
| BF Borgers (BFB) | |
| | | |
$ | 1,365 | |
| Grassi | |
$ | 2,559 | | |
$ | 1,439 | |
| TOTAL | |
$ | 2,559 | | |
$ | 2,804 | |
“Audit Fees” consisted
of the aggregate fees billed for professional services rendered for the audit of our annual consolidated financial statements and the
reviews of the interim condensed consolidated financial statements included in our Quarterly Reports on Form 10-Q and for any other
services that were normally provided in connection with our statutory and regulatory filings or engagements.
Pre-Approval Policies and Procedures
Under the Sarbanes-Oxley Act,
all audit and non-audit services performed by our auditors must be approved in advance by our Audit Committee to assure that such services
do not impair the auditors’ independence from us. In accordance with its policies and procedures, our Audit Committee pre-approved
the audit services performed by BFB and Grassi for our consolidated financial statements as of and for the year ended December 31,
2022 and 2021.
Vote Required
Approval of the ratification
of Grassi as our independent registered public accounting firm for the fiscal year ending December 31, 2023 requires a majority of
the votes of the shares present in person or represented by proxy at the Annual Meeting to vote “FOR” the proposal.
Recommendation of Our Board
Our Board recommends that
the stockholders vote FOR the approval of Proposal No. 2, the ratification of the appointment of Grassi as our independent
registered public accounting firm for the fiscal year ending December 31, 2023.
PROPOSAL NO. 3:
TO APPROVE THE AMENDMENT AND RESTATEMENT OF
OUR 2010 EQUITY INCENTIVE PLAN, A COPY OF SUCH AMENDED AND RESTATED PLAN IS INCLUDED AS APPENDIX A TO THIS INFORMATION STATEMENT (THE
“PLAN”), TO INCREASE THE NUMBER OF SHARES AUTHORIZED FOR ISSUANCE UNDER THE PLAN TO 37,500,000.
Information Regarding the Plan
Reasons for the Adoption of the Plan
There are approximately
230,000shares currently available under the Plan and the board of directors believes that our ability to continue providing non-cash
compensation and incentives in the form of incentive stock options, non-statutory stock options, restricted stock, restricted stock units,
stock appreciation rights, performance units, and performance shares is crucial to our ability to attract, retain, and motivate talented
employees, officers, consultants, and non-employee directors and that the adoption of the Plan is advisable and in our best interests.
The Board determined to increase the number of shares reserved and available for issuance under the Plan by 30.5 million shares because
it believes that the current number is insufficient for the purposes of the Plan for future issuances. The market for quality personnel
is competitive, and the ability to obtain and retain competent personnel is of great importance to the Company’s business operations.
Approval of the Plan
On August 3, 2018,
the Board approved and on August 28, 2018 the holders of 40,827,931 of the outstanding votes entitled to vote on the matter, representing
55.12% of the votes of our issued and outstanding voting shares, executed and delivered to the Company the written consents approving
the Plan. Accordingly, in compliance with the laws of the State of Nevada and our bylaws a majority of the outstanding voting shares
has approved the Plan, and no other vote or proxy is required of the shareholders. At the 2022
annual meeting, our stockholders voted (77%) to increase the number of shares available under the Plan to 120,000,000. After giving
effect to the reverse stock split at a ratio of 1-for 125, effective August 25, 2023, the current maximum aggregate number of shares
that may be sold under the Plan is 960,000 shares of common stock.
Summary of the Material Terms of the Plan
The material terms of the
Plan are outlined below. This summary is qualified in its entirety by reference to the complete text of the Plan. Stockholders are urged
to read the actual text of the Plan in its entirety, which is set forth as Appendix A to this Information Statement.
Shares Available for Awards
The total number of shares
of our common stock that may be subject to awards under the Plan is 960,000 which increases the number of shares authorized for issuance
under the Plan by 26,040,000 shares. Under the Plan, the terms and number of options or other awards to be granted in the future are
to be determined in the discretion of the plan administrator. No determination has been made regarding awards or grants under the Plan
or as to the benefits or amounts that will be received by or allocated to our non-employee directors, executive officers, and other eligible
employees under the Plan. We do not have any other equity incentive plans.
Eligibility
The persons eligible to receive
awards under the Plan consist of our employees, directors, and consultants. There are 84 employees, 5 directors, and 14 consultants currently
eligible to receive awards under the Plan.
Administration
The Plan shall be administered
by the Board or a committee appointed by the Board, which committee shall be constituted to comply with applicable laws. If and so long
as the common stock is registered under Section 12(b) or 12(g) of the Exchange Act, the Board shall consider in selecting
the administrator and the membership of any committee acting as administrator the requirements regarding (i) “nonemployee
directors” within the meaning of Rule 16b-3 under the Exchange Act;
(ii) “independent directors” as described in
the listing requirements for any stock exchange on which Shares are listed; and (iii) Section 15(b)(i) of the Plan if
the Company pays salaries for which it claims deductions that are subject to the Code section 162(m) limitation on its U.S. tax
returns.
The plan administrator has
the full authority to select those individuals eligible to receive awards and the amount and type of awards. Subject to the terms of the
Plan, the plan administrator is authorized to select eligible persons to receive awards, determine the type and number of awards to be
granted and the number of shares of our common stock to which awards will relate, specify times at which awards will be exercisable or
may be settled (including performance conditions that may be required as a condition thereof), set other terms and conditions of awards,
prescribe forms of award agreements, interpret and specify rules and regulations relating to the Plan, and make all other determinations
that may be necessary or advisable for the administration of the Plan. The plan administrator may amend the terms of outstanding awards,
in its discretion; provided that any amendment that adversely affects the rights of the award recipient must receive the approval of such
recipient.
Type of Awards. The
following types of awards are available for grant under the 2018 Plan: incentive stock options, non-statutory stock options, restricted
stock, restricted stock units, stock appreciation rights, performance units, and performance shares.
Stock Options
Grant of Options. The
Committee may award ISOs and NSOs (collectively referred to as “Options”) to grantees. The exercise price per share of an
Option will be at least 100% of the fair market value per share of our stock underlying the award on the grant date. The Committee will
determine the terms and conditions (including any performance requirements) under which an Option will become exercisable and will include
such information in the award agreement.
Special Limitations on
ISOs. In the case of a grant of an Option intended to qualify as an ISO to a grantee who owns more than ten percent of the total combined
voting power of all classes of our outstanding stock (a “Ten Percent Stockholder”), the exercise price of the Option will
not be less than 110% of the fair market value of a share of our stock on the grant date. Additionally, an Option will constitute an ISO
only (i) if the grantee is an employee of the Company or a subsidiary of the Company; (ii) to the extent such Option is specifically
designated as an ISO in the related award agreement; and (iii) to the extent that the aggregate fair market value (determined at
the time the option is granted) of the shares of stock with respect to which all ISOs held by such grantee become exercisable for the
first time during any calendar year (under the Plan and all other plans of the grantee’s employer and its affiliates) does not exceed
$100,000.
Exercise of Options.
An Option may be exercised by the delivery to us of written notice of exercise and payment in full of the exercise price (plus the amount
of any taxes which we may be required to withhold). If not exercised, Options will expire at such time as the Committee determines. However,
no Option may be exercised more than ten years from the date of grant, or in the case of an ISO held by a Ten Percent Stockholder, not
more than five years from the date of grant.
Restricted Stock and Restricted
Stock Units. The Committee may award to a participant shares of Common Stock subject to specified restrictions (“restricted
stock”). The Committee also may award to a participant-restricted stock units representing the right to receive shares of Common
Stock in the future. Shares of restricted stock and restricted stock units are subject to forfeiture if the participant does not meet
certain conditions such as continued employment over a specified period and/or the attainment of specified performance targets over such
period. The Committee will determine the terms and conditions (including any performance requirements) for each award of restricted stock
or restricted stock units and will include such information in the award agreement.
Effect of Certain Transactions.
In the event of a change in control of the Company, outstanding awards under the Plan may be subject to accelerated vesting or settlement
as provided in the individual award agreements. Upon the occurrence of certain corporate transactions, which may include a change in control,
outstanding awards generally will be subject to the terms of the agreement entered into in connection with the transaction, which may
provide for the assumption or substitution of awards by the surviving corporation or its parent or subsidiary, for accelerated vesting
and accelerated expiration, or for settlement in cash or cash equivalents.
Nontransferability of Awards.
Generally, during the lifetime of a grantee, only the grantee may exercise rights under the Plan and no award will be assignable or transferable
other than by will or laws of descent and distribution. If authorized in the award agreement, a grantee may transfer, not for value, all
or part of an NSO to certain family members (including trusts and foundations for their benefit). Neither restricted stock nor restricted
stock units may be sold, transferred, assigned, pledged, or otherwise encumbered or disposed of during the restricted period or prior
to the satisfaction of any other restrictions prescribed by the Committee.
Amendment and Termination.
Subject to applicable laws and stock exchange listing standards requiring stockholder approval under certain circumstances, our Board
of Directors may, at any time, amend or terminate the Plan, provided that no such action may be taken that adversely affects any rights
or obligations with respect to any awards previously made under the Plan without the consent of the applicable participants.
Plan Benefits. All grants
of awards under the Plan will be discretionary and, therefore, the benefits and amounts that will be received under the Plan are not determinable.
Federal Income Tax Consequences.
The following is a summary of the general federal income tax consequences to the Company and to U.S. taxpayers of awards to be granted
under the Plan. Tax consequences for any particular individual or under state or non-U.S. tax laws may be different.
NSOs. No taxable income
is reportable when a NSO is granted. Upon exercise, generally, the recipient will have ordinary income equal to the fair market value
of the underlying shares of stock on the exercise date minus the exercise price. Any gain or loss upon the disposition of the stock received
upon exercise will be capital gain or loss to the recipient if the appropriate holding period under federal tax law is met for such treatment.
ISOs. No taxable income
is reportable when an ISO is granted or exercised (except for grantees who are subject to the alternative minimum tax, who may be required
to recognize income in the year in which the ISO is exercised). If the recipient exercises the ISO and then sells the underlying shares
of stock more than two years after the grant date and more than one year after the exercise date, the excess of the sale price over the
exercise price will be taxed as long-term capital gain or loss. If the recipient exercises the ISO and sells the shares before the end
of the two- or one-year holding periods, he or she generally will have ordinary income at the time of the sale equal to the fair market
value of the shares on the exercise date (or the sale price, if less) minus the exercise price of the ISO.
Restricted Stock and Restricted
Stock Units. A recipient of restricted stock or restricted stock units will not have taxable income upon the grant unless, in the
case of restricted stock, he or she elects to be taxed at that time. Instead, he or she will have ordinary income at the time of vesting
equal to the fair market value on the vesting date of the shares (or cash) received minus any amount paid for the shares.
Performance Awards.
Typically, a recipient will not have taxable income upon the grant of performance awards. Subsequently, when the conditions and requirements
for the grants have been satisfied and the payment determined, any cash received and the fair market value of any common stock received
will constitute ordinary income to the recipient.
Tax Effect for the Company.
We generally will receive a tax deduction for any ordinary income recognized by a grantee in respect of an award under the Plan (for example,
upon the exercise of a NSO). In the case of ISOs that meet the holding period requirements described above, the grantee will not recognize
ordinary income; therefore, we will not receive a deduction.
No Appraisal Rights
Our stockholders do not have any “appraisal”
or “dissenters” rights in connection with the approval or implementation of the Plan.
Vote Required
Approval of the amendment
and restatement of the Plan requires a majority of the votes of the shares present in person or represented by proxy at the Annual Meeting
to vote “FOR” the proposal.
Recommendation of Our Board
Our Board recommends that the stockholders vote FOR
the approval of Proposal No. 3, the amendment and restatement of the Plan.
PROPOSAL NO. 4
TO APPROVE THE CONVERSION OF SERIES C PREFERRED
SHARES INTO COMMON SHARES.
Preferred Series C – Via Motors
On January 24, 2023 (the “Original
Issue Date”), an Amended and Restated Agreement and Plan of Merger (the “VIA Merger Agreement”) was executed by and
among Ideanomics, Inc., Longboard Merger Corp., VIA Motors International, Inc., and Shareholder Representative Services LLC,
as the Stockholders’ Representative. Upon closing of the VIA Merger Agreement, 1,159,276 shares of Series C Convertible Preferred
Stock (“Series C Preferred”) were issued to the Via Motors International Shareholders (the “Holders”).
According to the Certificate of Designation of
Series C Convertible Preferred Stock of Ideanomics, Inc., each share of Series C Preferred is eligible to convert into
twenty (20) shares of Common Stock upon shareholder approval.
On August 25, 2023, a 125:1 reverse split
(the “Reverse Split”) became effective on Ideanomics Common Stock. As a result, the issued shares of Series C Preferred
remain unchanged, but now eligible to convert into 0.16 shares of Common Stock upon shareholder approval. After the Reverse Split, these
shares may be converted by Series C Preferred Holders into 185,484 common shares.
Method of Conversion. Subject to receipt
of the Conversion Shareholder Approval, each share of Series C Preferred Stock shall be convertible, at any time and from time to
time from and after the Original Issue Date and after the Reverse Split into 0.16 shares of Common Stock. Holders shall effect conversions
by providing the Corporation with the form of conversion notice (a "Notice of Conversion"). Each Notice of Conversion shall
specify the number of shares of Series C Preferred Stock to be converted, the number of shares of Series C Preferred Stock owned
prior to the conversion at issue, the number of shares of Series C Preferred Stock owned subsequent to the conversion at issue and
the date on which such conversion is to be effected, which date may not be prior to the date the applicable Holder delivers such Notice
of Conversion to the Corporation (such effective date, the "Conversion Date").
Forced Conversion. In the event the Holders
of the Series C Preferred Stock have not exercised the Conversion Rights set forth herein within six (6) months of the SEC first
declaring the Series C Preferred registration statement effective (the “Effective Date”) the Series C Preferred
Stock shall automatically be converted as if the Holders had exercised their Conversion Rights on the Effective Date.
Effect of Conversion. Shares of Series C
Preferred converted into Common Stock shall be canceled and shall not be reissued.
Vote Required
Approval of Proposal No. 4
requires a majority of the votes of the shares present in person or represented by proxy at the Annual Meeting to vote “FOR”
the proposal.
Recommendation of Our Board
Our Board recommends that the Company’s stockholders
vote FOR the approval of Proposal No. 4.
PROPOSAL NO. 5
APPROVAL OF ISSUANCE OF SECURITIES IN ONE OR
MORE NON-PUBLIC OFFERINGS WHERE THE MAXIMUM DISCOUNT AT WHICH SECURITIES WILL BE OFFERED WILL BE EQUIVALENT TO A DISCOUNT OF 20% BELOW
THE MARKET PRICE OF OUR COMMON STOCK, IN ACCORDANCE WITH NASDAQ LISTING RULES 5635(b) and 5635(d)
Our common stock is currently
listed on the Nasdaq Capital Market and, as such, we are subject to Nasdaq Listing Rules. Pursuant to Nasdaq Listing Rule 5635(b) (“Rule 5635(b)”),
stockholder approval is required prior to the issuance of securities that will result in a change of control of a listed company, which
for purposes of Nasdaq Listing Rule 5635(b) is generally deemed to occur when an investor or investor group acquires or has
the right to acquire 20% or more of a company’s outstanding common stock or voting power and such ownership or voting power would
be the largest ownership position. Stockholders should note that a “change of control” as described under Nasdaq Listing Rule 5635(b) applies
only with respect to the application of such rule and does not constitute a “change of control” for purposes of Nevada
law, our organizational documents, or any other purpose. Nasdaq Listing Rule 5635(d) (“Rule 5635(d)”) requires
us to obtain shareholder approval prior to the issuance of our shares of common stock in connection with certain non-public offerings,
issued below the “minimum price” for the Company’s shares of common stock as defined in Nasdaq Rule 5635(d), involving
the sale, issuance or potential issuance by the Company of shares of Common Stock (and/or securities convertible into or exercisable for
Common Stock) equal to 20% or more of the shares of Common Stock outstanding before the issuance. Shares of our Common Stock issuable
upon the exercise or conversion of warrants, options, debt instruments, preferred stock or other equity securities issued or granted in
such non-public offerings will be considered shares issued in such a transaction in determining whether the 20% limit has been reached,
except in certain circumstances such as issuing warrants that are not exercisable for a minimum of six months and have an exercise price
that exceeds market value. We may effectuate the approved offerings or transactions in one or more transactions, subject to the limitations
herein.
We may seek to raise additional
capital to implement our business strategy and enhance our overall capitalization. We have not determined the particular terms for such
prospective offerings. Because we may seek additional capital that triggers the requirements of Rules 5635(b) and 5635(d), we
are seeking shareholder approval now, so that we will be able to move quickly to take full advantage of any opportunities that may develop
in the equity markets.
We hereby submit this Proposal
No. 5 to our stockholders for their approval of the potential issuance of shares of our Common Stock, or securities convertible into
our Common Stock, in one or more non-public capital-raising transactions, or offerings, subject to the following limitations:
| (iii) | The maximum discount at which securities
will be offered (which may consist of a share of Common Stock and a warrant for the issuance
of up to an additional share of Common Stock) will be equivalent to a discount of 20% below
the “Minimum Price” as defined by Nasdaq, or such lower amount as permitted by
Nasdaq, of our shares of Common Stock at the time of issuance in recognition of the limited
public float of our traded common stock and historical volatility making the pricing discount
of our stock required by investors at any particular time difficult, at this time, to predict.
Nasdaq defines the “minimum price” as the lower of (1) the closing price
(as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement or
(2) the average closing price of the common stock (as reflected on Nasdaq.com) for the
five trading days immediately preceding the signing of the binding agreement; |
| (iv) | The aggregate number of shares issued
in the offerings will not exceed 50,000,000 shares of our Common Stock, subject to adjustment
for any forward stock split effected prior to the offerings (including pursuant to preferred
stock, options, warrants, convertible debt or other securities exercisable for or convertible
into Common Stock); |
| (v) | The total aggregate consideration will not exceed $50,000,000. |
| (vi) | Such offerings will occur, if at all,
on or before 12 months following the date of the Annual Meeting, unless a shorter time is
required by Nasdaq; and |
| (vii) | Such other terms as our board of directors shall deem to be in the best interests of the Company and its stockholders, not inconsistent
with the foregoing. |
The issuance of shares
of our Common Stock, or other securities convertible into shares of our Common Stock, in accordance with any offerings would dilute,
and thereby reduce, each existing stockholder’s proportionate ownership in our Common Stock. The stockholders do not have preemptive
rights to subscribe to additional shares that may be issued by the Company in order to maintain their proportionate ownership of the
Common Stock.
The issuance of shares
of Common Stock in one or more non-public offerings could have an anti-takeover effect. Such issuance could dilute the voting power of
a person seeking control of the Company, thereby deterring or rendering more difficult a merger, tender offer, proxy contest or an extraordinary
corporate transaction opposed by the Company.
Our board of directors
has not yet determined the terms and conditions of any offerings. As a result, the level of potential dilution cannot be determined at
this time, but as discussed above, we may not issue more than 50,000,000 shares of Common Stock in the aggregate pursuant to the authority
requested from stockholders under this proposal (subject to adjustment for any reverse stock split). It is possible that if we conduct
a non-public stock offering, some of the shares we sell could be purchased by one or more investors who could acquire a large block of
our Common Stock. This would concentrate voting power in the hands of a few stockholders who could exercise greater influence on our
operations or the outcome of matters put to a vote of stockholders in the future.
We cannot determine what
the actual net proceeds of the offerings will be until they are completed, but as discussed above, the aggregate dollar amount of the
non-public offerings will be no more than $50,000,000. If all or part of the offerings is completed, the net proceeds will be used for
general corporate purposes. We currently have no arrangements or understandings regarding any specific transaction with investors, so
we cannot predict whether we will be successful should we seek to raise capital through any offerings.
Vote Required
Approval of the issuance
of securities in one or more non-public offerings, as required by and in accordance with Nasdaq Listing Rules 5635(b) and 5635(d), requires
a majority of the votes of the shares present in person or represented by proxy at the Annual Meeting to vote “FOR” the proposal.
Recommendation of Our Board
Our Board recommends that
the Company’s stockholders vote FOR the approval of Proposal No. 5to approve the issuance of securities in one or more
non-public offerings, as required by and in accordance with Nasdaq Listing Rules 5635(b) and 5635(d).
PROPOSAL NO. 6
APPROVAL OF AN AMENDMENT OF THE COMPANY’S
SECOND TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK AND PREFERRED STOCK
General
Our
Board has adopted, approved and declared advisable, an amendment to our certificate of incorporation, to
increase our authorized shares of (i) common stock from 12,000,000 shares to 1,500,000,000 shares and (ii) preferred stock
from 50,000,000 shares to 60,000,000 shares. Our Board has recommended that this proposed amendment be presented to our stockholders
for approval. The amendment to increase our authorized shares will become effective upon the filing of the amendment with the Secretary
of State of Nevada.
The
text of the proposed form of Certificate of Amendment to our Second Amended and Restated Certificate of Incorporation, which we refer
to as the “Certificate of Amendment”, is attached hereto as Appendix B.
Reasons for Effecting the Increase in Authorized Shares
As
of the Record Date, there were approximately 11,993,714 shares of the Company’s common stock issued and outstanding. Thus, approximately
6,286 authorized shares of common stock currently remain available for issuance.
The
Board of Directors believes it is in the best interest of the Company and its shareholders to increase the number of authorized shares
of common stock to provide the Company with flexibility to issue shares of common stock for general corporate purposes, which could include
strategic investments, strategic partnership arrangements, awards or grants under employee equity incentive plans, or equity based financing
to support company execution of business strategy. The availability of additional authorized shares of common stock would allow the Company
to execute any of these transactions in the future without additional shareholder approval, except as may be required in particular cases
by the Company’s Certificate of Incorporation, applicable law or the rules of any stock exchange or other system on which the
Company’s securities may then be listed.
| |
● |
Based on the number of shares of common stock currently authorized for issuance under its Certificate of Incorporation, the Company does not have enough shares available to sell to a third party that might be interested in making a strategic investment in the Company without shareholder approval, which may make it difficult to engage in such a transaction in timely manner. |
| |
● |
Additionally, the Company does not have shares available to issue options or restricted stock to employees, and unless the proposal to increase the number of authorized shares is approved, it will continue to be difficult to hire and retain key talent to help complete a sale of the Company or other strategic alternative due to the inability to offer any equity-based compensation. |
| |
● |
Finally, the Company would be unable to raise additional cash through the sale of common stock without stockholder approval if shares are not available. |
The
Board of Directors believes it would be in the best interests of the Company and its shareholders to have shares of common stock available
for any of these purposes, if needed. Although the Company may require raising additional capital to fund its operations in the future,
which may involve the issuance of common stock, it currently has no transactions pending.
Effects of the Increase
in Authorized Common Stock
Approving
the amendment to increase the authorized number of shares of the Company’s common stock will not result in any dilution to current
shareholders unless and until the Company issues such additional shares in the future. The Board of Directors selected the size of the
proposed increase to provide the Company with sufficient authorized shares for use for any of the purposes described above, including
any necessary financing transactions, as well as to provide it the ability to take advantage of other opportunities that may be available
to it that would require the use of shares of common stock without the cost and time that would be needed to seek further amendments to
its Certificate of Incorporation.
If
this proposal is approved, the newly authorized shares of common stock would have the same rights as the presently authorized shares,
including the right to cast one vote per share of common stock. Although the authorization of additional shares would not, in itself,
have any effect on the rights of any holder of the Company’s common stock, the future issuance of additional shares of common stock
(other than a stock split or dividend) would have the effect of diluting the voting rights and could have the effect of diluting earnings
per share and book value per share of existing shareholders.
Potential Anti-takeover
Effects of Increase in Authorized Common Stock
In
addition to the more traditional uses described above, the Company could issue shares of its stock as a defense against efforts to obtain
control of the Company. The Board of Directors does not intend or view the increase in authorized shares of stock as an anti-takeover
measure, nor is the Company aware of any effort by any third party to accumulate our securities or obtain control of the Company by means
of a merger, tender offer, solicitation in opposition to management or otherwise.
Reasons for Effecting the Increase in Authorized Preferred Shares
As
of the Record Date, there were approximately 29,994,600 shares of the Company’s preferred stock issued and outstanding and approximately
165,400 shares of preferred Series C stock reserved for future issuance under the Company’s outstanding options, warrants and
preferred stock. Thus, approximately 21,120,000 authorized shares of preferred stock currently remain available for issuance.
The
Board of Directors believes it is in the best interest of the Company and its shareholders to increase the number of authorized shares
of preferred stock to provide the Company with flexibility to issue shares of preferred stock for general corporate purposes, which could
include strategic investments, strategic partnership arrangements, awards or grants under employee equity incentive plans, or equity based
financing to support company execution of business strategy. The availability of additional authorized shares of preferred stock would
allow the Company to execute any of these transactions in the future without additional shareholder approval, except as may be required
in particular cases by the Company’s Certificate of Incorporation, applicable law or the rules of any stock exchange or other
system on which the Company’s securities may then be listed.
| |
● |
Based on the number of shares of preferred stock currently authorized for issuance under its Certificate of Incorporation, the Company does not have enough shares available to sell to a third party that might be interested in making a strategic investment in the Company without shareholder approval, which may make it difficult to engage in such a transaction in timely manner. |
| |
● |
Additionally, the Company does not have shares available to issue options or restricted stock to employees, and unless the proposal to increase the number of authorized shares is approved, it will continue to be difficult to hire and retain key talent to help complete a sale of the Company or other strategic alternative due to the inability to offer any equity-based compensation. |
| |
● |
Finally, the Company would be unable to raise additional cash through the sale of common stock without stockholder approval if shares are not available. |
The
Board of Directors believes it would be in the best interests of the Company and its shareholders to have shares of preferred stock available
for any of these purposes, if needed. Although the Company may require raising additional capital to fund its operations in the future,
which may involve the issuance of common stock, it currently has no transactions pending.
Effects of the Increase
in Authorized Preferred Stock
Approving
the amendment to increase the authorized number of shares of the Company’s preferred stock will not result in any dilution to current
shareholders unless and until the Company issues such additional shares in the future. The Board of Directors selected the size of the
proposed increase to provide the Company with sufficient authorized shares for use for any of the purposes described above, including
any necessary financing transactions, as well as to provide it the ability to take advantage of other opportunities that may be available
to it that would require the use of shares of preferred stock without the cost and time that would be needed to seek further amendments
to its Certificate of Incorporation.
If
this proposal is approved, the newly authorized shares of preferred stock would have the same rights as the presently authorized shares,
including the right to cast one vote per share of common stock. Although the authorization of additional shares would not, in itself,
have any effect on the rights of any holder of the Company’s common stock, the future issuance of additional shares of preferred
stock (other than a stock split or dividend) would have the effect of diluting the voting rights and could have the effect of diluting
earnings per share and book value per share of existing shareholders.
Potential Anti-takeover
Effects of Increase in Authorized Preferred Stock
In
addition to the more traditional uses described above, the Company could issue shares of its stock as a defense against efforts to obtain
control of the Company. The Board of Directors does not intend or view the increase in authorized shares of stock as an anti-takeover
measure, nor is the Company aware of any effort by any third party to accumulate our securities or obtain control of the Company by means
of a merger, tender offer, solicitation in opposition to management or otherwise.
Vote Required
Approval of Proposal No. 6
requires a majority of the votes of the shares present in person or represented by proxy at the Annual Meeting to vote “FOR”
the proposal.
Recommendation of Our Board
Our Board recommends that the Company’s stockholders
vote FOR the approval of Proposal No. 6.
PROPOSAL
NO. 7
TO
APPROVE THE potential ISSUANCE OF more than 20% of the Company’s oustanding SHARES OF COMMON STOCK TO YORKVILLE upon the conversion
of the debenture(s) and PREFERRED STOCK that were issued in financing transactions, AND IN ACCORDANCE WITH THE STOCKHOLDER APPROVAL REQUIREMENTS
OF NASDAQ LISTING RULES 5635(B) AND 5635(D).
At
our annual meeting, holders of our Common Stock will be asked to approve, for purposes of compliance with Nasdaq Listing Rules 5635(b)
and 5635(d), the issuance of up to [*] shares of our Common Stock to YA II PN Ltd., or an affiliate of YA II PN Ltd. (“Yorkville
Advisors” or the “Investors”), in connection with and pursuant to certain outstanding securities held by the Yorkville
Advisors, including certain secured convertible debentures and shares of Series B Preferred Stock, as described in more detail below,
that were issued in previous financing transactions, and in accordance with the stockholder approval requirements of Nasdaq Listing Rules
5635(b) and 5635(d), pursuant to which Yorkville Advisors may, subject to the conditions and limitations set forth in such securities,
to convert up to an aggregate of [$8.5 million] worth of shares of Common Stock (the “Yorkville Shares”).
Background
First Debenture
On
October 25, 2022, the Company entered into a Secured Debenture Purchase Agreement (the “Original SDPA”) Yorkville Advisors,
and simultaneously consummated the sale to Yorkville Advisors of a Secured Convertible Debenture (the “First Debenture”)
in a private placement pursuant to the Original SDPA. Upon the terms and subject to the conditions contained in the Original SDPA, the
Company issued and sold to the Investor, and the Investor purchased the First Debenture in the principal amount of $6,500,000 upon the
signing of the SDPA, provided, however, that the Company agreed to provide the Investor with a lien on all the assets of
the Company; provided, further, however, the Company received a net amount of $5,000,000 after payment of the
agreed upon financing fee of $1,500,000.
The
conversion price of the First Debenture was not subject to adjustment except for subdivisions or combinations of Common Stock. The principal,
accrued and unpaid interest, and any other amounts outstanding pursuant to the terms of the First Debenture matured on February 24, 2023
and interest accrued on the outstanding principal at an annual rate equal to 8%; provided that such interest rate shall be increased
to 18% upon an Event of Default (as discussed in the FirstDebenture). At any time before the maturity, the Investor may convert the Debenture
at its option into shares of the Company’s common stock at a variable conversion price of 95% of the lowest daily VWAP during the
five consecutive trading days immediately preceding the conversion date or other date of determination, but not lower than $6.25 per
share.
Second Debenture
On
March 30, 2023, the Company and Yorkville Advisors amended the Original SDPA for the Company
to sell and the Yorkville Advisors to purchase convertible debentures. In accordance with SDPA, the Company issued and sold to the Investor,
and the Investor purchased, secured convertible debentures in the principal amount to be
mutually agreed, convertible into shares of the Company’s common stock, of which $6,500,000 of principal amount was purchased upon
the original signing of the agreement. $6,250,000 principal amount of this debenture was subsequently repaid. Under the amended
SDPA, the Investor purchased an additional debenture with substantially the same terms in
the principal amount of $1,400,000 (the “Second Debenture”).
On
April 4, 2023, this SDPA was further, amended (as amended, the “Amended SDPA”) to remove any reference to convertible features.
The
Company and the Investor also amended the Second Debenture, by removing any references to
convertible features such that the Second Debenture is no longer convertible into the Company’s common stock, or any of the Company’s
issued and outstanding stock.
On
July 14, 2023, the Second Debenture was amended to (a) add a Triggering Event repayment provision as described above and (b) add a provision
giving the holder the right to convert the debenture into shares of Common Stock upon an event of default on the terms described above.
Third Debenture
On
April 17, 2023, the Company entered into the Second Amendment to the Secured Debenture Purchase Agreement, as previously amended (the
“Second Amended SDPA”) with the Investor, which amended the original Amended SDPA, and simultaneously consummated the sale
to the Investor of a new Secured Convertible Debenture (the “Third Debenture”) in a private placement pursuant to the Second
Amended SDPA. Upon the terms and subject to the conditions contained in the Second Amended SDPA and Third Debenture, the Company promised
to pay to the Investor $750,000 on September 30, 2023, (a) subject to earlier redemption at the Company’s option (upon payment
of a redemption premium of 10% of the principal amount being redeemed or paid, plus, 50% of the principal amount being redeemed or paid
(unless the Buyer, in its sole and absolute discretion, elects to exercise a Call Right (as defined in the Second Amended Option Agreement)
in connection with the applicable redemption or payment, and (b) subject to acceleration at the holder’s option upon an event of
default described in the Indenture. The Company will also pay interest on outstanding principal of the Debenture at an interest rate
of eight percent (8%), provided that such interest rate shall be increased to 18% upon an event of default.
On July 14, 2023,
the Third Debenture was amended to (a) add a Triggering Event repayment provision as described above and (b) add a provision giving the
holder the right to convert the debenture into shares of Common Stock upon an event of default on the terms described above.
Fourth Debenture
On
May 1, 2023, the Company entered into the Third Amendment to the Secured Debenture Purchase Agreement, as previously amended (the “Third
Amended SDPA”) with the Investor, which further amended the Original SDPA, and simultaneously consummated the sale to the Investor
of a new Secured Convertible Debenture (the “Fourth Debenture”) in a private placement pursuant to the Third Amended
SDPA for a purchase price of $3,500,000.00. Upon the terms and subject to the conditions contained in the Third Amended SDPA and Fourth
Debenture, the Company promises to pay to the Investor $4,130,000 (subject to reduction to $3,780,000 on the Energica SPA Closing Date
(as defined therein) on August 29, 2023, (a) subject to earlier redemption at the Company’s option (upon payment of a redemption
premium of 20% of the principal amount being redeemed or paid, and (b) subject to acceleration at the holder’s option upon an event
of default described in the Fourth Debenture. The Company will also pay interest on outstanding principal of the Fourth Debenture at
an interest rate of eight percent (8%), provided that such interest rate shall be increased to 18% upon an event of default.
On
July 14, 2023, the Fourth Debenture was amended to (a) add a Triggering Event repayment provision as described above and (b) add a provision
giving the holder the right to convert the debenture into shares of Common Stock upon an event of default on the terms described above
Fifth Debenture
On
July 14, 2023, the Company entered into the Fourth Amendment to the Secured Debenture Purchase Agreement, as previously amended (the
“Fourth Amended SDPA”) with the Investor, and Timios Acquisition 1 LLC (together with Investor, collectively, the “Buyer”),
which further amended the Original SDPA, and simultaneously consummated the sale to the Buyer of a new Secured Convertible Debenture
(the “Fifth Debenture”) in a private placement pursuant to the SDPA for a purchase price of $1,850,000. Upon the terms
and subject to the conditions contained in the Amended SDPA and Fifth Debenture, the Company promises to pay to the Buyer $1,850,000
on November 1, 2023, (a) subject to earlier redemption at the Company’s option (upon payment of a redemption premium of 20% of
the principal amount being redeemed or paid (the “Redemption Premium”)), and (b) subject to acceleration at the holder’s
option upon an event of default described in the Fifth Debenture. The Company will also pay interest on the outstanding principal amount
of the Fifth Debenture at a rate of 8% per annum, provided that such interest rate shall be increased to 18% upon an event of default.
If
at any time the daily dollar volume-weighted average price (the “VWAP”) of the Company’s Common Stock is less than
0.01 per share for five of any seven consecutive trading days (a “Triggering Event,” and the first day of each such day of
each such occurrence, a “Triggering Date”), then the Company shall pay the entire outstanding balance of the Fifth Debenture
within ten calendar days after the Triggering Date in an amount equal to the sum of (i) the entire outstanding principal amount, (ii)
the Redemption Premium thereon, and (iii) accrued and unpaid interest.
Upon
an event of default, the holder of the Fifth Debenture is entitled to convert any portion of the outstanding principle and accrued interest
into shares of Common Stock, at a conversion price per share equal to the lower of (i) $8.75 (subject to adjustment in certain
circumstances as described in the Fifth Debenture) or (ii) 90% of the lowest daily VWAP of the Common Stock during the ten consecutive
trading days immediately preceding the conversion date, but not lower than $0.01. The Fifth Debenture contains a standard “buy-in”
provision in the event that the Company fails to shares within three trading days after receipt of a notice of conversion, and a standard
“blocker” provision that limits the right to convert any portion of the Fifth Debenture to the extent that after giving effect
to such conversion he holder together with its affiliates would beneficially own more than 4.99% of the number of shares of Common Stock
outstanding immediately after giving effect to such conversion.
$100,000
of the purchase price of the Fifth Debenture shall be retained by the Buyer until the Company has satisfied the Fifth Closing Post-Closing
Obligations (as defined below), provided, however, that the Buyer shall retain the Fifth Closing Holdback Amount as liquidated damages
(without any reduction in the principal amount of the Fifth Debenture or any change to the Buyer’s right to repayment in full thereunder)
if the Company does not satisfy the Fifth Closing Post-Closing Obligations on or prior to July 20, 2023. “Fifth Closing Post-Closing
Obligations” means the Company’s satisfaction of each of the following conditions: (1) delivery of documentation as required
or otherwise requested by Buyer for it to obtain a first-priority perfected security interest in respect of the Company’s ownership
in Via Motors, Inc., its domestic subsidiaries, and in all of their assets and (2) delivery of a collateral assignment, pursuant to which
the Company shall collaterally assign to Buyer all rights of payment under any intercompany indebtedness of any subsidiary in favor of
the Company.
The
proceeds of the Fifth Debenture were used to pay fees due to Grassi & Co., CPAs, P.C., the Company’s independent auditor, and
to the Company’s legal counsel.
Sixth Debenture
As
previously reported, on July 14, 2023, the Company entered into the Fourth Amended SDPA with the Buyer, which further amended the Original
SDPA. On September 7, 2023, the Company consummated the sale to the Buyer of a new Secured Convertible Debenture (the “Sixth Debenture”)
in a private placement pursuant to the Fourth Amended SDPA for a purchase price of $450,000. Upon the terms and subject to the conditions
contained in the Fourth Amended SDPA and Sixth Debenture, the Company promised to pay to the Buyer $500,000 on October 6, 2023, (a) subject
to earlier redemption at the Company’s option and (b) subject to acceleration at the holder’s option upon an event of default
described in the Sixth Debenture. The Company will pay no interest on the outstanding principal amount of the Sixth Debenture, provided
that the interest rate shall be 18% upon an event of default.
Upon
an event of default, the holder of the Sixth Debenture is entitled to convert any portion of the outstanding principle and accrued
interest into shares of the Company’s Common Stock, at a conversion price per share equal to the lower of (i) $2.46 (subject
to adjustment in certain circumstances as described in the Sixth Debenture) or (ii) 90% of the lowest daily volume weighted average
price of the Common Stock during the ten consecutive trading days immediately preceding the conversion date, but not lower than
$0.492. The Sixth Debenture contains a standard “buy-in” provision in the event that the Company fails to shares within
three trading days after receipt of a notice of conversion, and a standard “blocker” provision that limits the right to
convert any portion of the Sixth Debenture to the extent that after giving effect to such conversion he holder together with its
affiliates would beneficially own more than 4.99% of the number of shares of Common Stock outstanding immediately after giving
effect to such conversion.
The
proceeds of the Sixth Debenture were used to pay fees due to Energica Motor Company S.p.A.l.
Stockholder
Approval Requirement
As
noted above, the issuance of the Yorkville Shares to Yorkville Advisors is subject to approval by the Company’s stockholders in
compliance with the applicable Listing Rules of the Nasdaq Stock Market. The Common Stock is listed on the Nasdaq Capital Market and,
as such, the Company is subject to the Nasdaq Listing Rules.
Because
our Common Stock is listed on the Nasdaq, we are subject to Nasdaq’s rules and regulations. Pursuant to Nasdaq Listing Rule 5635(b),
stockholder approval is required prior to the issuance of securities that will result in a change of control of a listed company, which
for purposes of Nasdaq Listing Rule 5635(b) is generally deemed to occur when an investor or investor group acquires or has the right
to acquire 20% or more of a company’s outstanding common stock or voting power and such ownership or voting power would be the
largest ownership position. Shareholders should note that a “change of control” as described under Nasdaq Listing Rule 5635(b)
applies only with respect to the application of such rule and does not constitute a “change of control” for purposes of Nevada
law, our organizational documents, or any other purpose.
Pursuant
to Nasdaq Listing Rule 5635(d), stockholder approval is required prior to a 20% Issuance at a price that is less than the Minimum
Price. For purposes of Nasdaq Listing Rule 5635(d), (A) “20% Issuance” means a transaction, other than a public
offering, involving: (i) the sale, issuance or potential issuance by us of Common Stock (or securities convertible into or exercisable
for Common Stock), which alone or together with sales by our officers, directors, or substantial stockholders equals 20% or more of Common
Stock (which for purposes of this calculation, includes issued and outstanding shares of our voting Common Stock and non-voting common
stock) or 20% or more of the voting power outstanding before the issuance and (B) “Minimum Price” means a price that
is the lower of: (i) the closing price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement;
or (ii) the average closing price of Common Stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the
signing of the binding agreement. In determining whether multiple issuances should be aggregated for purposes of Nasdaq Listing Rule 5635(d),
Nasdaq will consider several factors, including the timing of the issuances. Stockholder approval of this proposal will constitute stockholder
approval for purposes of Nasdaq Listing Rule 5635(d).
While
the issuance of the SDPA Shares would not in itself constitute a “20% issuance” pursuant to Nasdaq Listing Rule 5635(d),
the issuance of the SDBA Shares when aggregated with the shares of Common Stock issued to Yorkville Advisors under prior agreements could
constitute a “20% issuance” pursuant to Nasdaq Listing Rule 5635(d). As a result, the Company’s issuance of the SDBA
Shares under the SDBA may be subject to stockholder approval under Nasdaq Listing Rule 5635(d) (including rules related to the aggregation
of offerings thereunder).
Reasons
for Transaction and Effect on Current Stockholders
Our
board of directors has determined that the SDPA and Debentures, with such modifications, amendments, or changes (consistent with the
intent and purpose of this proposal) agreed upon by the parties to the SDPA and Debentures, as applicable, and in accordance with the
stockholder approval requirements of Nasdaq Listing Rules 5635(b) and 5635(d) is in the best interests of us and our stockholders because
the right to issue the SDPA Shares to Yorkville Advisors.
Vote Required
Approval of the issuance
of shares of Common Stock to Yorkville Advisors pursuant to the terms of the SDPA and Debentures with such modifications, amendments,
or changes (consistent with the intent and purpose of this proposal) agreed upon by the parties to the SDPA and Debentures, and in accordance
with the stockholder approval requirements of Nasdaq Listing Rules 5635(b) and 5635(d), requires a majority of the votes of the shares
present in person or represented by proxy at the Annual Meeting to vote “FOR” the proposal.
Board Recommendation
The
board of directors unanimously recommends that the stockholders vote “FOR” Proposal No. 7 to approve the issuance
of shares of Common Stock to Yorkville Advisors pursuant to the terms of the SDPA and Debentures, with such modifications, amendments,
or changes (consistent with the intent and purpose of this proposal) agreed upon by the parties to the SDPA and Debentures, and in accordance
with the stockholder approval requirements of Nasdaq Listing Rules 5635(b) and 5635(d).
PROPOSAL NO. 8:
AUTHORIZATION TO ADJOURN THE ANNUAL MEETING
If the Annual Meeting is convened
and a quorum is present, but there are not sufficient votes to approve the foregoing proposals described in the Proxy Statement, the Company
may move to adjourn the Annual Meeting at that time in order to enable our Board of Directors to solicit additional proxies.
In this Proposal No. 8,
we are asking our stockholders to authorize the Company to adjourn the Annual Meeting to another time and place, if necessary or advisable,
to solicit additional proxies in the event that there are not sufficient votes to approve the forgoing proposals, each as described in
the Proxy Statement. If our stockholders approve this Proposal No. 8, we could adjourn the Annual Meeting and any adjourned session
of the Annual Meeting and use the additional time to solicit additional proxies, including the solicitation of proxies from our stockholders
that have previously voted. Among other things, approval of this proposal could mean that even if we had received proxies representing
a sufficient number of votes to defeat the forgoing proposals, we could adjourn the Annual Meeting without a vote on such proposals and
seek to convince our stockholders to change their votes in favor of such proposals.
If it is necessary or advisable
to adjourn the Annual Meeting, no notice of the adjourned meeting is required to be given to our stockholders, other than an announcement
at the Annual Meeting of the time and place to which the Annual Meeting is adjourned, so long as the meeting is adjourned for 45 days
or less and no new record date is fixed for the adjourned meeting. At the adjourned meeting, we may transact any business which might
have been transacted at the original meeting.
Vote Required
Approval of this resolution
requires the holders of a majority of the votes of the shares present in person or represented by proxy at the Annual Meeting to vote
“FOR” the proposal.
Board Recommendation
Our Board unanimously recommends a “FOR”
vote for this proposal to authorize the adjournment of the Annual Meeting.
EXECUTIVE OFFICERS, DIRECTORS, AND CORPORATE
GOVERNANCE
Directors and Executive Officers.
The
following sets forth the name and position of each of our current executive officers and directors as of the filing date of this Annual
Report.
| Name | |
Age | | |
Position |
| Shane McMahon | |
| 53 | | |
Executive Chair |
| Alfred P. Poor | |
| 53 | | |
Chief Executive Officer and Director |
| Scott Morrison | |
| 53 | | |
Chief Financial Officer |
| James S. Cassano | |
| 77 | | |
Director |
| Andrea Hayward | |
| 57 | | |
Director |
Mr. Shane
McMahon. Mr. McMahon was appointed Executive Chairman as of July 23, 2021, previously he was Vice Chairman from January 12,
2016 to the date of his appointment as Executive Chairman and was previously our Chairman from July 2010 to January 2016. Prior
to joining us, from 2000 to December 31, 2009, Mr. McMahon served in various executive level positions with World Wrestling
Entertainment, Inc. (NYSE: WWE). Mr. McMahon also sits on the Boards of Directors of International Sports Management (USA) Inc.,
a Delaware corporation, and Global Power of Literacy, a New York not-for-profit corporation.
Mr. Alfred
P. Poor. Our Chief Executive Officer is a former Chief Operating Officer at Global Data Sentinel, a cybersecurity company that
specializes in identity management, file access control, protected sharing, reporting and tracking, AI and thread response, and backup
and recovery. He is the former President and Chief Operating Officer of Agendize Services Inc., a company with an integrated suite of
applications that help businesses generate higher quality leads, improve business efficiency and customer engagement. Mr. Poor is
a client-focused and profitability-driven management executive with a track record of success at both rapidly-growing technology companies
and large, multi-national, organizations.
Mr. Scott
Morrison. Mr. Morrison was appointed Chief Financial Officer effective April 1, 2023. Previously, Mr. Morrison
served as Chief Financial Officer of Wave Charging, LLC, a subsidiary of the Company. Additionally, he held
the position of Chief Executive Officer for Evoq Nano, Inc., Finance Director at CRH Americas Materials, Inc. and Vice President-Finance
for Honeywell Aerospace.
Mr. James
S. Cassano. Mr. Cassano was appointed Vice Chairman of the Company effective as of July 23, 2021 and has been a director
since January 11, 2008. Mr. Cassano is currently a Partner and Chief Financial Officer of CoActive Health Solutions, LLC, a
worldwide contract research organization, supporting the pharmaceutical and biotechnology industries. Mr. Cassano has served as executive
vice president, chief financial officer, secretary and director of Jaguar Acquisition Corporation a Delaware corporation (OTCBB: JGAC),
a blank check company, since its formation in June 2005. Mr. Cassano has served as amanaging director of Katalyst LLC, a company
which provides certain administrative services to Jaguar Acquisition Corporation, since January 2005. In June 1998, Mr. Cassano
founded New Forum Publishers, an electronic publisher of educational material for secondary schools, and served as its chairman of the
Board and chief executive officer until it was sold to Apex Learning, Inc., a company controlled by Warburg Pincus, in August 2003.
He remained with Apex until November 2003 in transition as vice president business development and served as a consultant to the
company through February 2004. In June 1995, Mr. Cassano co-founded Advantix, Inc., a high volume electronic ticketing
software and transaction services company which handled event related client and customer payments, that was renamed Tickets.com and went
public through an IPO in 1999. From March
1987
to June 1995, Mr. Cassano served as senior vice president and chief financial officer of the Hill Group, Inc., a privately-held
engineering and consulting organization, and from February 1986 to March 1987, Mr. Cassano served as vice president of
investments and acquisitions for Safeguard Scientifics, Inc., a public venture development company. From May 1973 to February 1986,
Mr. Cassano served as partner and director of strategic management services (Europe) for the strategic management group of Hay Associates.
Mr. Cassano received a B.S. in Aeronautics and Astronautics from Purdue University and an M.B.A. from Wharton Graduate School at
the University of Pennsylvania.
Ms. Andrea
Hayward. On April 18, 2023, Ideanomics, Inc. appointed Andrea Hayward as an independent director of the Company
and as a member of the Audit Committee and Compensation Committee of the board, to be effective as of May 15, 2023. Ms. Hayward
worked for over 31 years at United Parcel Service, where she has delivered specialized supply chain and logistics services on a global
scale. Most recently, she served as Vice President of U.S. Network and Vice President of Transportation Technology, where she led over
8,000 employees with a business unit P&L of $1.5 billion. She served as a board member of the Quad County Urban League in Aurora Illinois,
providing strategic direction and operational oversight to an organization that supports economic development and social equity for those
who are disadvantaged. Additionally, she is a former academic advisor for the supply chain department at Governors State University in
University Park, Illinois. Other activities included UPS leadership committees - leading their Seasonality Committee and serving
as a member of their Women in Operations, Advanced Technology, and Emergency Crisis committees. Ms. Hayward begins her service as
an independent director of the Company on May 15, 2023. She has served as a director of Rehrig Pacific Company and Atlanta CASA.
There
are no agreements or understandings between any of our executive officers or directors and any other persons to resign at the request
of another such other person and to act on behalf of or at the direction of any such other person.
Directors
are elected for one-year term and until their successors are duly elected and qualified.
Corporate
Governance
Our
current corporate governance practices and policies are designed to promote shareholder value and we are committed to the highest standards
of corporate ethics and diligent compliance with financial accounting and reporting rules. Our Board provides independent leadership in
the exercise of its responsibilities. Our management oversees a system of internal controls and compliance with corporate policies and
applicable laws and regulations, and our employees operate in a climate of responsibility, candor and integrity.
Corporate
Governance Guidelines
We
and our Board are committed to high standards of corporate governance as an important component in building and maintaining shareholder
value. To this end, we regularly review our corporate governance policies and practices to ensure that they are consistent with the high
standards of other companies. We also closely monitor guidance issued or proposed by the SEC and the provisions of the Sarbanes-Oxley
Act, as well as the emerging best practices of other companies. The current corporate governance guidelines are available on the Company’s
website www.ideanomics.com. Printed copies of our corporate governance guidelines may be obtained, without charge, by contacting our Corporate
Secretary at 1441 Broadway, Suite 5116, New York, NY 10018.
The
Board and Committees of the Board
The
Company is governed by the Board that currently consists of four members: Shane McMahon, Alfred Poor, James S. Cassano, and Andrea Hayward.
The Board has established three Committees: the Audit Committee, the Compensation Committee and the Nominating and Governance Committee. Each
of the Audit Committee, Compensation Committee and Nominating and Governance Committee are comprised entirely of independent directors.
From time to time, the Board may establish other committees. The Board has adopted a written charter for each of the Committees which
are available on the Company’s website www.ideanomics.com. Printed copies of these charters may be obtained, without charge, by
contacting our Corporate Secretary at 1441 Broadway, Suite 5116, New York, NY 10018.
Governance
Structure
Our
Board of Directors is responsible for corporate governance in compliance with reporting laws and for representing the interests of our
shareholders. As of the date of this Annual report, the Board was composed of five members, four of whom are considered independent, non-executive
directors. Details on Board membership, oversight and activity are reported below.
We
encourage our shareholders to learn more about our Company’s governance practices at our website, www.ideanomics.com.
The
Board’s Role in Risk Oversight
The
Board oversees that the assets of the Company are properly safeguarded, that the appropriate financial and other controls are maintained,
and that the Company’s business is conducted wisely and in compliance with applicable laws and regulations and proper governance.
Included in these responsibilities is the Board of Directors’ oversight of the various risks facing the Company. In this regard,
the Board seeks to understand and oversee critical business risks. The Board does not view risk in isolation. Risks are considered in
virtually every business decision and as part of the Company’s business strategy. The Board recognizes that it is neither possible
nor prudent to eliminate all risk. Indeed, purposeful and appropriate risk-taking is essential for the Company to be competitive on a
global basis and to achieve its objectives.
While
the Board oversees risk management, Company management is charged with managing risk. The Company has robust internal processes and a
strong internal control environment to identify and manage risks and to communicate with the Board. The Board and the Audit Committee
monitor and evaluate the effectiveness of the internal controls and the risk management program at least annually. Management communicates
routinely with the Board, Board committees and individual directors on the significant risks identified and how they are being managed.
Directors are free to, and indeed often do, communicate directly with senior management.
The
Board implements its risk oversight function both as a whole and through Committees. Much of the work is delegated to various Committees,
which meet regularly and report back to the full Board. All Committees play significant roles in carrying out the risk oversight function.
In particular:
•The
Audit Committee oversees risks related to the Company’s financial statements, the financial reporting process, accounting and legal
matters. The Audit Committee members meet separately with representatives of the independent auditing firm.
•The
Compensation Committee evaluates the risks and rewards associated with the Company’s compensation philosophy and programs. The Compensation
Committee reviews and approves compensation programs with features that mitigate risk without diminishing the incentive nature of the
compensation. Management discusses with the Compensation Committee the procedures that have been put in place to identify and mitigate
potential risks in compensation.
Independent
Directors
In
considering and making decisions as to the independence of each of the directors of the Company, the Board considered transactions and
relationships between the Company (and its subsidiaries) and each director (and each member of such director’s immediate family
and any entity with which the director or family member has an affiliation such that the director or family member may have a material
direct or indirect interest in a transaction or relationship with such entity). The Board has determined that James S. Cassano, Shane
McMahon, and Andrea Hayward are independent as defined in applicable SEC and NASDAQ rules and regulations, and that each constitutes
an “Independent Director” as defined in NASDAQ Listing Rule 5605.
Audit
Committee
Our
Audit Committee consists of James S. Cassano and Andrea Hayward with Mr. Cassano acting as Chair. The Audit Committee oversees our
accounting and financial reporting processes and the audits of the financial statements of our company. Mr. Cassano serves as our
Audit Committee financial experts as that term is defined by the applicable SEC rules. The Audit Committee is responsible for, among other
things:
| o | selecting our independent auditors and pre-approving all auditing and non-auditing services
permitted to be performed by our independent auditors; |
| o | reviewing with our independent auditors any audit problems or difficulties and management’s
response; |
| o | reviewing and approving all proposed related-party transactions, as defined in Item 404 of Regulation
S-K under the Securities Act of 1933, as amended; |
| o | discussing the annual audited financial statements with management and our independent auditors; |
| o | reviewing major issues as to the adequacy of our internal controls and any special audit steps
adopted in light of significant internal control deficiencies; |
| o | annually reviewing and reassessing the adequacy of our Audit Committee charter; |
| o | overseeing the work of our independent auditor, including resolution of disagreements between
management and the independent auditor regarding financial reporting; |
| o | reporting regularly to and reviewing with the full Board any issues that arise with respect
to the quality or integrity of the Company’s financial statements, the performance and independence of the independent auditors
and any other matters that the Audit Committee deems appropriate or is requested to review for the benefit of the Board. |
The
Audit Committee may engage independent counsel and such other advisors it deems necessary to carry out its responsibilities and powers,
and, if such counsel or other advisors are engaged, shall determine the compensation or fees payable to such counsel or other advisors.
The Audit Committee may form and delegate authority to subcommittees consisting of one or more of its members as the Audit Committee deems
appropriate to carry out its responsibilities and exercise its powers.
Compensation
Committee
Our
Compensation Committee consists of James S. Cassano and Andrea Hayward with Mr. Cassano acting as Chair. Our Compensation Committee
assists the Board in reviewing and approving the compensation structure of our directors and executive officers, including
all forms of compensation to be provided to our directors and executive officers. The Compensation Committee is responsible for, among
other things:
| • | reviewing and approving corporate goals and objectives relevant to the compensation of our chief
executive officer, evaluating the performance of our chief executive officer in light of those goals and objectives, and setting the compensation
level of our chief executive officer based on this evaluation; |
| • | reviewing and making recommendations to the Board with regard to the compensation of other executive
officers; |
| • | reviewing and making recommendations to the Board with respect to the compensation of our directors;
and |
| • | reviewing and making recommendations to the Board regarding all incentive-based compensation
plans and equity-based plans. |
The
Compensation Committee has sole authority to retain and terminate any consulting firm or other outside advisor to assist the committee
in the evaluation of director, chief executive officer or senior executive compensation and other compensation-related matters, including
sole authority to approve the firms’ fees and other retention terms. The Compensation Committee may also form and delegate authority
to subcommittees consisting of one or more members of the Compensation Committee.
Governance
and Nominating Committee
Our
Governance and Nominating Committee consists of Andrea Hayward and James S. Cassano with Andrea Hayward acting as Chair. The Governance
and Nominating Committee assists the Board of Directors in identifying individuals qualified to become our directors and in determining
the composition of the Board and its committees. The Governance and Nominating Committee is responsible for, among other things:
•identifying
and recommending to the Board nominees for election or re-election to the Board, or for appointment to fill any vacancy;
•selecting
directors for appointment to committees of the Board; and
•overseeing
annual evaluation of the Board and its committees for the prior fiscal year.
The
Governance and Nominating Committee has sole authority to retain and terminate any search firm that is to be used by the Company to assist
in identifying director candidates, including sole authority to approve the firms’ fees and other retention terms. The Governance
and Nominating Committee may also form and delegate authority to subcommittees consisting of one or more members of the Governance and
Nominating Committee.
Risk and Disclosure Committee
Our
Risk and Disclosure Committee consists of Paul Hancock, Andrea Hayward, and James S. Cassano
with Paul Hancock acting as Chair. The Risk and Disclosure Committee assists the Board of
Directors in fulfilling its oversight responsibilities To monitor the compliance of the Company and employees with all risk assessment
and reporting procedures. The Risk and Disclosure Committee
is responsible for, among other things:
The responsibilities of the Committee shall be:
| 1. | To monitor the compliance of the Company and employees
with all risk assessment and reporting procedures; |
| 2. | To identify material risks relating to the Company’s
internal controls and disclosures of such risks; |
| 3. | To review the effectiveness of the Company’s Code
of Ethics annually, and recommend to the Board any changes to the Company’s policies and internal controls as necessary |
| 4. | To review and evaluate the Company’s disclosure
controls and procedures; and |
| 5. | To oversee the effectiveness of employee training in risk
assessment and compliance. |
The Committee shall keep the Board apprised
of its activities, including as it relates to due diligence before execution of any Ideanomics acquisition and shall directly advise
the Board in detail of its material findings on a periodic basis. The Committee shall annually prepare a written report to the Board
summarizing its activities, conclusions, and recommendations for the past year and its agenda for the coming year.
Director
Qualifications
Directors
are responsible for overseeing the Company’s business consistent with their fiduciary duty to shareholders. This significant responsibility
requires highly-skilled individuals with various qualities, attributes and professional experience. The Board believes that there are
general requirements for service on the Company’s Board of Directors that are applicable to all directors and that there are other
skills and experience that should be represented on the Board as a whole but not necessarily by each director. The Board and the Governance
and Nominating Committee of the Board consider the qualifications of directors and director candidates individually and in the broader
context of the Board’s overall composition and the Company’s current and future needs.
Qualifications
for All Directors
In
its assessment of each potential director candidate, including those recommended by shareholders, the Governance and Nominating Committee
considers the nominee’s judgment, integrity, experience, independence, understanding of the Company’s business or other related
industries and such other factors the Governance and Nominating Committee determines are pertinent in light of the current needs of the
Board. The Governance and Nominating Committee also takes into account the ability of a director to devote the time and effort necessary
to fulfill his or her responsibilities to the Company.
The
Board and the Governance and Nominating Committee require that each director be a recognized person of high integrity with a proven record
of success in his or her field. Each director must demonstrate innovative thinking, familiarity with and respect for corporate governance
requirements and practices, an appreciation of multiple cultures and a commitment to sustainability and to dealing responsibly with social
issues. In addition to the qualifications required of all directors, the Board assesses intangible qualities including the individual’s
ability to ask difficult questions and, simultaneously, to work collegially.
The
Board does not have a specific diversity policy, but considers diversity of race, ethnicity, gender, age, cultural background and professional
experiences in evaluating candidates for Board membership. Diversity is important because a variety of points of view contribute to a
more effective decision-making process.
Qualifications,
Attributes, Skills and Experience to be represented on the Board as a Whole
The
Board has identified particular qualifications, attributes, skills and experience that are important to be represented on the Board as
a whole, in light of the Company’s current needs and business priorities. The Company’s services are performed in areas of
future growth located outside of the United States. Accordingly, the Board believes that international experience or specific knowledge
of key geographic growth areas and diversity of professional experiences should be represented on the Board. In addition, the Company’s
business is multifaceted and involves complex financial transactions. Therefore, the Board believes that the Board should include some
directors with a high level of financial literacy and some directors who possess relevant business experience as a Chief Executive Officer
or President. Our business involves complex technologies in a highly specialized industry. Therefore, the Board believes that extensive
knowledge of the Company’s business and industry should be represented on the Board.
Summary
of Qualifications of Current Directors
Set
forth below is a narrative disclosure that summarizes some of the specific qualifications, attributes, skills and experiences of our directors.
For more detailed information, please refer to the biographical information for each director set forth above.
Mr. Shane
McMahon. Mr. McMahon has significant marketing and promotion experience and has been instrumental in exploiting pay-per-view
programming on a global basis. In light of our business and structure, Mr. McMahon’s extensive executive and industry experience
led us to the conclusion that he should serve as a director of our Company.
Mr. Alfred
P. Poor. Mr. Poor is a client-focused and profitability-driven management executive with a track record of success at both
rapidly-growing technology companies and large, multi-national, organizations. In light of our business and structure, Mr. Poor’s
extensive executive experience and his educational background led us to the conclusion that he should serve as a director of our Company.
Mr. James
S. Cassano. Mr. Cassano has substantial experience as a senior executive in management consulting, corporate development,
mergers and acquisitions and start up enterprises across a numerous different industries. In light of our business and structure, Mr. Cassano’s
extensive executive experience and his educational background led us to the conclusion that he should serve as a director of our Company.
Ms. Andrea
Hayward. Ms. Hayward worked for over 31 years at United Parcel Service, where she has delivered specialized supply chain and
logistics services on a global scale. Most recently, she served as Vice President of U.S. Network and Vice President of Transportation
Technology, where she led over 8,000 employees with a business unit P&L of $1.5 billion.
Mr.
Paul Hancock. Mr. Hancock has served as Vice President, Deputy CEO & CFO of InoBat AS, a company that specializes
in the research, development, production, recycling, and final disposal of custom-designed innovative electric batteries, and he has
over 25 years of experience in corporate finance, financial control and strategic planning. From March 2016 to June 2021, Mr. Hancock
previously held the position of Deputy Chief Financial Officer at Aston Martin Lagonda, the Iconic British manufacturer of luxury sports
cars.
Family
Relationships
There
are no family relationships among our directors and officers.
Involvement
in Certain Legal Proceedings
To
the best of our knowledge, none of our directors or executive officers has, during the past ten years:
| o | been convicted in a criminal proceeding or been subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses); |
| o | had any bankruptcy petition filed by or against the business or
property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer,
either at the time of the bankruptcy filing or within two years prior to that time; |
| o | been subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining,
barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking,
savings and loan, or insurance activities, or to be associated with persons engaged in any such activity; |
| o | been found by a court of competent jurisdiction in a civil action
or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities
or commodities law, and the judgment has not been reversed, suspended, or vacated; |
| o | been the subject of, or a party to, any federal or state judicial
or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of
a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or
regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary
or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or
removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity;
or |
| o | been the subject of, or a party to, any sanction or order, not subsequently
reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C.
78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent
exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
Except
as set forth in our discussion below in - Certain Relationships and Related Transactions, and Director Independence - Transactions
with Related Persons, none of our directors, director nominees or executive officers has been involved in any transactions with us or
any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations
of the SEC.
Promoters
and Certain Control Persons
We
did not have any promoters at any time during the past five fiscal years.
Delinquent
Section 16(a) Reports
Section 16(a) of
the Exchange Act requires that our executive officers and directors and other persons who beneficially own more than 10% of a registered
class of our equity securities file with the SEC reports of ownership and reports of changes in ownership of shares and other equity securities.
Such executive officers and directors and other persons who beneficially own more than 10% of a registered class of our equity securities
are required by the SEC to furnish us with copies of all Section 16(a) filed by such reporting persons.
Based
solely on our review of such forms furnished to us or written representations provided to us by the reporting persons, we believe that
all filing requirements applicable to our executive officers, directors and other persons who beneficially own more than 10% of a registered
class of our equity securities were complied with in the year ended December 31, 2022.
Code
of Ethics
Our
board of directors adopted a code of business conduct and ethics that applies to our directors, officers, employees, subsidiaries, agents,
contractors and consultants, which became effective in January 2016 and was updated in December 2021. We have posted a copy
of our code of business conduct and ethics on our website at https://investors.ideanomics.com/corporate-governance.
Compensation Discussion
and Analysis
Compensation Philosophy
The
primary goals of our Board with respect to executive compensation are to attract and retain talented and dedicated executives, to tie
annual and long-term cash and stock incentives to the achievement of specified performance objectives, and to create incentives resulting
in increased stockholder value. To achieve these goals, our Compensation Committee recommends to our Board, executive compensation packages,
generally comprising a mix of salary, discretionary bonus and equity awards. Although we have not adopted any formal guidelines for allocating
total compensation between equity compensation and cash compensation, we have implemented and maintain compensation plans that tie a substantial
portion of our executives’ overall compensation to the achievement of corporate goals.
Compensation Committee
Judgment and Discretion
The
Compensation Committee, consisting entirely of independent directors, reviews and approves the compensation of our Named Executive Officers,
or NEOs, and makes recommendations regarding equity awards to our Board, which acts as the administrator for our equity compensation plans.
The
Compensation Committee’s executive compensation determinations are subjective and the result of the Compensation Committee’s
business judgment, which is informed by the experience of its members and input provided by market surveys, its independent compensation
consultant, our Chief Executive Officer (other than with respect to his own compensation), other members of management, and investors.
The
Compensation Committee regularly evaluates our executive compensation program to determine if changes are appropriate. In so doing, the
Compensation Committee may consult with its independent compensation consultant and management; however, the Compensation Committee makes
final decisions regarding the compensation paid to our NEOs based on its own judgment. The Compensation Committee may consider factors
such as individual performance, company performance, market conditions, financial goals, retention and stockholder interests in determining
compensation.
The Role of the Compensation
Consultant
The
Compensation Committee selects and retains the services of an independent compensation consultant. The independent compensation consultant
is independent and that the work that it performed in 2021 did not raise any conflicts of interest. During 2021, the Compensation Committee’s
independent compensation consultant, Metin Aksoy at Frederic W. Cook Executive Compensation Consultants, provided no services to us other
than services for the Compensation Committee and worked with our management only on matters for which the Compensation Committee is responsible.
The Compensation Committee did not retain a compensation consultant in 2022.
The Role of Executives
in Executive Compensation Decisions
The
Board and our Compensation Committee generally seek input from our Chief Executive Officer, Alfred P. Poor, when discussing the performance
of, and compensation levels for, executives other than himself. In 2021, the Compensation Committee also worked with Conor McCarthy, our
then Chief Financial Officer, and currently, Scott Morrison, our Chief Financial Officer, to evaluate the financial, accounting, tax and
retention implications of our various compensation programs. Neither Mr. Poor, who is also our director, nor Messrs. McCarthy
or Morrison participated in deliberations relating to their own compensation.
The Role of Investors
Stockholders
are provided the opportunity to cast an advisory vote (“Say-On-Pay”) on the compensation of our NEOs. In our most recent
Say-On-Pay vote, conducted at our 2022 annual meeting of stockholders, held on November 25, 2022, our stockholders approved the compensation
of our named executive officers on an advisory basis, with approximately 83% of the votes cast in favor of the fiscal 2021 compensation
of our named executive officers. In setting fiscal 2023 compensation, we will consider the outcome of the Say-on-Pay Vote during our 2022
annual meeting of stockholders and will continue to consider the outcome of future Say-on-Pay Votes, as well as stockholder feedback received
throughout the year, when making compensation decisions for our executive officers. In addition to the Say on Pay vote, the investors
were also provided an opportunity to vote on the frequency at which such Say on Pay votes would be held (“Say On Frequency”
votes). At the November annual meeting, the majority (56%) of investors voted for the Say on Frequency votes to occur every three
years, with a minority (38%) voting for every year, followed by biannually and those abstaining. We also have ongoing discussions
with many of our investors regarding various corporate governance topics, including environment, social and governance topics and executive
compensation. The Compensation Committee also considers these discussions while reviewing our executive compensation program.
The Role of Peer Companies
In
2021, the Compensation Committee reviewed a survey of peer group companies’ total standard compensation components for certain executives,
including the named executive officers, as provided by our compensation consultant. The peer group was based on market segment, market
capitalization of less than $5 Billion, and trailing four quarters revenue of less than $1 Billion. It included companies from Automotive,
Renewable Energy; and Fintech. The companies considered were:
| Bloom Energy Corporation |
|
Workhorse Group Inc. |
|
Veritone, Inc. |
| Cerence Inc |
|
Blink Charging Co. |
|
Arcimoto, Inc. |
| FuelCell Energy, Inc |
|
Gevo, Inc. |
|
CleanSpark, Inc. |
| Clean Energy Fuels Corp. |
|
CEVA, Inc. |
|
Electrameccanica Vehicles Corp. |
| PROS Holdings, Inc. |
|
Stoneridge, Inc. |
|
Allied Motion Technologies Inc. |
In
general, these companies operate in similar industries and many have similar cost structures, business models (subject to the relevant
market segment) and global reach. We also considered the following companies in Charging & Energy; EV Components; Vehicle OEM;
and CleanTech as additional peers.
| ChargePoint | |
Romeo Power | |
Hyliion |
| PG & E | |
Ayro. | |
QuantumScape |
| ABM Industries | |
Canoo | |
XL Fleet |
| Beam Global | |
Tesla | |
Plug Power |
| | |
Lordstown Motors | |
Polar Power |
| First Solar | |
Navistar | |
Enphase Energy |
The
Compensation Committee considers compensation data from the peer companies to the extent the executive positions at these companies are
considered comparable to our positions and informative of the competitive environment. Compensation data for our peer group were collected
from available proxy-disclosed data. This information was gathered and analyzed for low, medium and high ratings for annual base salary,
short-term incentive pay elements and long-term incentive pay elements.
The
survey determined that the NEOs as a whole were positioned at the medium to high end of the peer group in terms of cash compensation,
but in the very low end of the peer group in terms of total standard compensation and opportunities.
The
Compensation Committee considers peer group data provided by its independent compensation consultant to inform its decision-making process
so it can set total compensation levels that it believes are commensurate with the relative size, scope, and success of Ideanomics.
Elements of Compensation
We
evaluate individual executive performance with a goal of setting compensation at levels the Compensation Committee believes are comparable
with executives in other companies of similar size and stage of development while taking into account our relative performance and our
own strategic goals. The compensation received by our named executive officers consists of the following elements:
Base Salary
Base
salaries for our executives are established based on the scope of their responsibilities and individual experience, taking into account
competitive market compensation paid by other companies for similar positions within our industry. The Compensation Committee considers
compensation data from the peer companies to the extent the executive positions at these companies are considered comparable to our positions
and informative of the competitive environment.
Variable Pay
We
design our variable pay programs to be both affordable and competitive in relation to the market. We monitor the market and adjust our
variable pay programs as needed. Our variable pay programs, such as our bonus program, are designed to motivate employees to achieve overall
goals. Our programs are designed to avoid entitlements, to align actual payouts with the actual results achieved, and to be easy to understand
and administer.
Equity-Based Incentives
Salaries
and bonuses are intended to compensate our executive officers for short-term performance. We also have adopted an equity incentive program
intended to reward longer-term performance and to help align the interests of our NEOs with those of our stockholders. We believe that
long-term performance is achieved through an ownership culture that rewards performance by our NEOs through the use of equity incentives.
Our 2010 equity incentive plan has been established to provide our employees, including our NEOs, with incentives to help align those
employees’ interests with the interests of our stockholders.
When
making equity-award decisions, the Compensation Committee considers market data, the grant size, the forms of long-term equity compensation
available to it under our existing plans and the status of previously granted awards. The amount of equity incentive compensation granted
reflects the executives’ expected contributions to our future success. Existing ownership levels are not a factor in award determination,
as the Compensation Committee does not want to discourage executives from holding significant amounts of our stock.
Future
equity awards that we make to our named executive officers will be driven by our sustained performance over time, our NEOs’ ability
to impact our results that drive stockholder value, their level of responsibility, their potential to fill roles of increasing responsibility,
and competitive equity award levels for similar positions in comparable companies. Equity forms a key part of the overall compensation
for each executive officer and is evaluated each year as part of the annual performance review process and incentive payout calculation.
The
amounts awarded to the NEOs are based on the Compensation Committee’s subjective determination of what is appropriate to incentivize
the executives. The grants to named executive officers vest over a two-year period with monthly ratable vesting on each anniversary of
the grant date. All equity awards to our employees, including NEOs, and to directors have been granted and reflected in our financial
statements, based upon the applicable accounting guidance, with the exercise price equal to the fair market value of one share of common
stock on the grant date.
In
order to encourage a long-term perspective and to encourage key employees to remain with us, our stock options typically have monthly
ratable vesting over a two-year period. Generally, vesting ends upon termination of services and exercise rights of vested options cease
three months after termination of services. Prior to the exercise of an option, the holder has no rights as a stockholder with respect
to the shares subject to such option, including voting rights and the right to receive dividends or dividend equivalents.
Benefits Programs
We
design our benefits programs to be both affordable and competitive in relation to the market while conforming to local laws and practices.
We monitor the market and local laws and practices and adjust our benefits programs as needed. We design our benefits programs to provide
an element of core benefits and, to the extent possible, offer options for additional benefits, be tax-effective for employees in any
foreign country and balance costs and cost-sharing between our employees and us.
Timing of Equity Awards
Only
the Compensation Committee may approve restricted stock or stock option grants to our executive officers. Shares of restricted stock and
stock options are generally granted at meetings of the Compensation Committee or pursuant to a unanimous written consent of the Compensation
Committee. The exercise price of a newly granted option is the closing price of our common stock on the date of grant.
Treatment of Options
for Executives Upon Termination
Options
are granted generally at regularly scheduled board meetings during the fiscal year. All options vest pro-rata over the enumerated period
depending on the date of hire or relevant employment contract. Upon termination of employment, options cease to vest for executives unless
otherwise negotiated under the terms of a severance agreement.
Options
to purchase 9,377,000 shares of common stock were granted under the equity incentive program in fiscal year 2021, after which 17,350,746
shares remained available for granting. At the 2022 annual meeting, our stockholders voted (77%) to increase the number of shares available
under the 2010 Stock Option Plan to 120,000,000.
Executive Equity Ownership
We
encourage our executives to hold a significant equity interest in our company. However, we do not have specific share retention and ownership
guidelines for our executives.
2022 Named Executive
Officer Compensation
Our
executive compensation program is designed to motivate and reward performance in a straightforward and effective way, while recognizing
our philosophy, management style and targeted returns. The compensation of our named executive officers has three primary components:
(i) annual base salary, (ii) annual cash incentive and (iii) long-term equity awards in the form of performance-based options.
2022 Annual Base Salary
Base
salary is a customary, fixed element of compensation intended to attract and retain executives. Weighing the factors listed above, the
Compensation Committee recommended that, effective January 1, 2022, the base salaries of Messrs. Poor, McCarthy and Sklar should
be $800,000, $525,000, and $475,000 per year, respectively. No executive officer received a salary increase in 2022.
2022 Annual Incentives.
Our
annual cash incentive program is a variable, at-risk component of our named executive officers’ compensation that is based on an
appraisal of performance using specific metrics. For fiscal year 2022, our annual incentives were based on the contributions of named
executive officers to the aggregation of capital necessary for the company’s growth, the magnitude of which capital raise was in
excess of $500M during the relevant term.
Summary Compensation Table (2022 and 2021)
The following table sets
forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons (our “named executive
officers”) for services rendered in all capacities during the noted periods. No disclosure is provided for fiscal years for which
those persons were not named executive officers.
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Nonqualified | | |
| | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
Nonequity | | |
deferred | | |
| | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
incentive plan | | |
compensation | | |
All other | | |
| |
| | |
| | |
Salary | | |
Bonus | | |
Stock awards | | |
Option awards | | |
compensation | | |
earnings | | |
compensation | | |
Total | |
| Name and Principal Position | |
Year | | |
($) | | |
($) | | |
($)(3) | | |
(#) | | |
($) | | |
($) | | |
($) | | |
($) | |
| Shane McMahon (Executive Chairman) (1) | |
2021 | | |
| 133,334 | | |
| — | | |
| 615,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 748,334 | |
| | |
2022 | | |
| 583,335 | | |
| 0 | | |
| 750,000 | | |
| 750,000 | | |
| — | | |
| 218,750 | | |
| 554,987 | | |
| 1,305,088 | |
| Alfred P. Poor (Chief Executive Officer) (2) | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
2020 | | |
| 383,333 | | |
| 500,000 | | |
| — | | |
| 1,000,000 | | |
| — | | |
| — | | |
| — | | |
| 883,333 | |
| | |
2021 | | |
| 645,833 | | |
| 500,000 | | |
| 5,535,000 | | |
| 2,000,000 | | |
| — | | |
| — | | |
| — | | |
| 6,680,833 | |
| | |
2022 | | |
| 674,047 | | |
| 500,00 | | |
| 750,000 | | |
| 750,000 | | |
| | | |
| 149,968 | | |
| 24,014 | | |
| 1,324,014 | |
| Conor McCarthy (Chief Financial Officer) (3) | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
2020 | | |
| 289,900 | | |
| 350,000 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 639,900 | |
| | |
2021 | | |
| 422,915 | | |
| 350,000 | | |
| 1,537,500 | | |
| 750,000 | | |
| — | | |
| — | | |
| — | | |
| 2,310,415 | |
| | |
2022 | | |
| 373,864 | | |
| 175,000 | | |
| | | |
| | | |
| | | |
| | | |
| 32,810 | | |
| 581,674 | |
| Stephen Johnston (Chief Financial Officer) (3)(4) | |
2022 | | |
| 135,625 | | |
| — | | |
| 300,000 | | |
| 1,500,000 | | |
| — | | |
| — | | |
| — | | |
| 135,625 | |
| Paula Whitten-Doolin (General Counsel) (5) | |
2022 | | |
| 314,962 | | |
| 100,000 | | |
| 250,000 | | |
| 425,000 | | |
| | | |
| | | |
| | | |
| 414,965 | |
| Anthony Sklar (SVP, Investor Relations) | |
2021 | | |
| 364,755 | | |
| 350,000 | | |
| 3,075,000 | | |
| 500,000 | | |
| — | | |
| — | | |
| — | | |
| 3,789,755 | |
| Robin Mackie | |
2022 | | |
| 505,561 | | |
| | | |
| 450,000 | | |
| 450,000 | | |
| | | |
| | | |
| | | |
| | |
| (1) |
Mr. McMahon was appointed Executive Chairman of the Company on July 23, 2021, and prior to this date Mr. McMahon was Vice-Chairman of the Company. Included in Mr. McMahon’s salary for 2021 is $29,167 for directors’ fees paid to him in his capacity as Vice-Chairman of the Company. The stock award of $615,000 includes a RSU grant with immediate vesting. Included in the ‘other compensation’ column is $495,936 in compensation deferred from prior years, as well as $59,051 in travel-related payments. Mr. McMahon deferred $218,750 of his $750,000 annual salary to 2023 in October of 2022. |
| |
|
| (2) |
Mr. Poor’s annual salary is $800,000, but he elected to defer $149,968 of his salary to 2023 in October of 2022. The remaining $24,014 reflects payout of vacation earned but not taken during 2021. |
| |
|
| (3) |
On September 16, 2022 Conor McCarthy resigned from his position as CFO, so this salary reflects a partial year payment. The additional $32,810 reflects a payout for vacation accrued in 2021 but not taken. Stephen Johnston replaced him as CFO on September 16, 2022. |
| |
|
| (4) |
Mr. Johnston’s employment at Ideanomics started in September 2022 so this table reflects a partial year payment period. |
| (5) |
Ms. Whitten-Doolin’s employment at Ideanomics started in March 2022 so this table reflects a partial year payment period. |
| |
|
| (6) |
On December 31, 2020 Bruno Wu resigned from his position as Executive Chairman. Reflects the aggregate grant date fair value of option or restricted stock units determined in accordance with FASB ASC Topic 718. |
Employment Agreements
Alfred P. Poor
Effective on July 31,
2020, we entered into employment agreement with Mr. Poor for a term of 2 years pursuant to which Mr. Poor will receive
an annual base salary of $500,000, a bonus of $300,000 earned on July 21, 2020, the date the employment contract became effective,
and will be entitled to participate in all employment benefit plan and policies of the Company generally available. Mr. Poor was
entitled to stock options of up to 2,000,000 shares in 2021. Effective July 23, 2021, Mr. Poor’s salary was increased
to $800,000.
Robin Mackie
Effective on August 29, 2021, we entered
into a contract employment agreement with Mr. Mackie pursuant to which Mr. Mackie would receive a monthly base salary of $37,500.
Effective February 2023, Mr. Mackie’s contract was amended to $45,833 per month. Mr. Mackie is not entitled to participate
in any of the employment benefit plan and/or policies of the Company generally available. Mr. Mackie was entitled to stock options
of up to 450,000 shares.
Scott Morrison
Effective on April 20,
2023, we entered into an employment agreement with Mr. Morrison pursuant to which Mr. Morrison will receive an annual salary
of $350,000 and will be entitled to participate in all employment benefit plans and policies of the Company.
Outstanding Equity Awards at Fiscal Year-End
The following table sets
forth the equity awards of our named executive officers outstanding at December 31, 2022.
| |
|
Option awards |
| |
|
|
|
|
|
Equity |
|
|
|
|
|
| |
|
|
|
|
|
Incentive |
|
|
|
|
|
| |
|
|
|
|
|
plan awards: Number |
|
|
|
|
|
| |
|
|
|
|
|
Of |
|
|
|
|
|
| |
|
Number of |
|
Number of |
|
Securities |
|
|
|
|
|
| |
|
securities |
|
securities |
|
underlying |
|
|
|
|
|
| |
|
underlying |
|
underlying |
|
unexercised |
|
Option |
|
|
|
| |
|
unexercised |
|
unexercised |
|
Unearned |
|
exercise |
|
|
Option |
| |
|
options |
|
options |
|
Options |
|
price |
|
|
Expiration |
| Name |
|
(#) exercisable |
|
(#) unexercisable |
|
(#) |
|
($) |
|
|
Date |
| Shane McMahon |
|
75,800 |
|
— |
|
— |
|
5.57 |
|
|
Nov 17, 2027 |
| |
|
500,000 |
|
— |
|
— |
|
0.53 |
|
|
February 22, 2029 |
| |
|
266,664 |
|
266,669 |
|
— |
|
1.84 |
|
|
Dec 10, 2030 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Alfred P. Poor |
|
2,000,000 |
|
— |
|
— |
|
1.98 |
|
|
February 20, 2029 |
| |
|
541,671 |
|
208,329 |
|
— |
|
0.53 |
|
|
May 8, 2030 |
| |
|
416,669 |
|
1,583,331 |
|
— |
|
2.37 |
|
|
July 31, 2031 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Conor McCarthy (1) |
|
1,500,000 |
|
— |
|
— |
|
0.53 |
|
|
Sept 20, 2029 |
| |
|
156,250 |
|
593,750 |
|
— |
|
2.37 |
|
|
July 31, 2031 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Anthony Sklar |
|
250,000 |
|
— |
|
— |
|
1.98 |
|
|
February 22, 2029 |
| |
|
650,000 |
|
— |
|
— |
|
0.53 |
|
|
May 8, 2030 |
| |
|
104,165 |
|
395,835 |
|
— |
|
2.37 |
|
|
July 31, 2031 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Stephen Johnston (2) |
|
— |
|
250,000 |
|
— |
|
0.21 |
|
|
July 31, 2031 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Paula Whitten-Doolin |
|
31,250 |
|
43,750 |
|
— |
|
0.82 |
|
|
March 13, 2032 |
| (1) |
On September 16, 2022 Conor McCarthy resigned from his position as CFO. Stephen Johnston replaced him as CFO on September 16, 2022. |
| (2) |
On March 31, 2023 Stephen Johnston resigned from his position as CFO. Scott Morrison replaced him as CFO on April1, 2023. |
CEO Pay Ratio
In accordance with Section 953(b) of
the Dodd-Frank Act and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual
total compensation of our employees and the annual total compensation of our CEO.
•The median
of the annual total compensation of our employees (other than our CEO) was $81,041 in 2022.
•The total
annual compensation of our CEO, as reported in the Summary Compensation Table, was $850,000 in 2022.
•Based
on the foregoing, the ratio of the annual total compensation of our CEO and the median of the annual total compensation of our employees
was 10 to 1.
We believe this pay ratio
is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. The SEC rules for identifying
the median compensated employee and calculating the pay ratio allows companies to apply various methodologies and apply various assumptions
and, as a result, the pay ratio we report may not be comparable to the pay ratio reported by other companies.
Identifying the Median
Employee
We used December 31,
2022 as the date to determine our workforce for purposes of determining the median compensated employee. As of December 31, 2022,
our workforce consisted of approximately 564 employees, with 391 employees (69%) based in the U.S. and 173 employees (31%) based in jurisdictions
outside the U.S.
To determine median employee
compensation, we utilized the amount reported in Box 5 on Form W-2 Wage and Tax Statement for each U.S. employee on the Company’s
payroll as of December 31, 2022 and by annualized data provided to us by our international subsidiaries. We captured all full-time
and part-time employees employed by us on December 31, 2022. We annualized compensation for permanent full-time and part-time employees
who were not employed by us for all of 2022. We believe that Form W-2 compensation is a consistently applied compensation measure
because it is readily available and represents a reasonable measure of total annual compensation in the US and annualized compensation
provides similar certainty outside the US.
Determining Annual
Total Compensation
We determined annual
total compensation for our median compensated employee by obtaining compensation data for this employee consistent with the methodology
we use to calculate total compensation as it appears in the Summary Compensation Table. We determined annual total compensation for our
CEO using the amount reported in the Summary Compensation Table.
Compensation of Directors
The following table
sets forth certain information concerning the compensation paid to our directors for services rendered to us during the fiscal year
ended December 31, 2022. Ms. Andrea Hayward was appointed as independent director on May 15, 2023. Mr. Paul Hancock was
appointed as independent director on September 1, 2023.
| |
|
|
|
|
|
|
|
|
|
Nonqualified |
|
|
|
|
| |
|
Fees earned |
|
|
|
|
|
Non-equity |
|
deferred |
|
|
|
|
| |
|
or |
|
Stock |
|
Option |
|
incentive plan |
|
compensation |
|
All other |
|
|
| |
|
paid in cash |
|
awards(1) |
|
awards(2) |
|
compensation |
|
earnings |
|
compensation |
|
Total |
| Name |
|
($) |
|
($) |
|
(#) |
|
($) |
|
($) |
|
($) |
|
($) |
| James S. Cassano(1) |
|
326,360 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
326,360 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Jerry Fan |
|
114,997 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
114,997 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Harry Edelson(2) |
|
213,752 |
|
— |
|
— |
|
— |
|
— |
|
|
|
213,752 |
(1) Mr. Cassano
received a $150,000 bonus for his assistance with the completion of the audit investigation.
(2) Mr. Edelson
resigned as an independent director of the Company on October 31, 2022. Prior to his resignation, he received a bonus for tax equalization
of $120,000.
Compensation Risk
The Compensation Committee
has reviewed and evaluated the incentive compensation policies and practices that cover all employees. On the basis of that review, the
Compensation Committee does not believe that its compensation policies and practices pose risks that are reasonably likely to have a material
adverse effect on Ideanomics.
We also note with respect
to risk factors that none of our executive officers served on the compensation committee (or equivalent, or the board) of any other entity
whose executive officers served on the company’s compensation committee. No executive officer served as a director of another entity
whose executive officers served on the company’s compensation committee. No executive officer served as a member of the compensation
committee or equivalent or the board absent compensation committee of another entity whose executive officers served as a company director.
Pay versus Performance Information
The following table sets forth information
concerning the compensation of our principal executive officer, or “PEO,” and, on an average basis, the compensation of our
other named executive officers, or “NEOs,” for each of the fiscal years ending December 31, 2022 and 2021, as such
compensation relates to our financial performance for each such fiscal year.
| Year |
|
Summary
Compensation
Table Total
for PEO |
|
Compensation
Actually Paid
to PEO |
|
Average
Summary
Compensation
Table Total for
Non-PEO
NEO’s |
|
Average
Compensation
Actually Paid to
Non-PEO NEO’s( |
|
Value
of Initial Fixed $100 Investment(5) Based on: |
|
Net
Income |
|
Company-
Selected
Measure |
Total
Shareholder
Return |
|
Peer Group
Total
Shareholder
Return |
|
| 2022 |
|
$ |
|
|
$ |
|
|
|
$ |
|
|
$ |
|
|
|
$ |
|
|
* |
|
$ |
|
|
* |
| 2021 |
|
$ |
|
|
$ |
|
|
|
$ |
|
|
$ |
|
|
|
$ |
|
|
* |
|
$ |
|
|
* |
____________
* Not
required for smaller reporting companies
[(1)]
[(2)]
[(3)]
[(4)]
[(5) Total
Shareholder Return assumes $100 was invested on December 31, 2020.]
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The
following table sets forth information known by us regarding the beneficial ownership of the Common Stock and Series A, Series B,
and Series C Preferred Stock as of , by:
| ● |
each
person who is known by us to be the beneficial owner of more than 5% of the outstanding shares of Common Stock or Series A ,
Series B, or Series C Preferred Stock; |
| |
|
| ● |
each of our current Named Executive Officers and directors; and |
| |
|
| ● |
all of our current executive officers and directors as a group. |
Beneficial
ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security
if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently
exercisable or exercisable within 60 days.
The
beneficial ownership percentages set forth in the table below are based on shares of Common Stock and shares of Series A Preferred
Stock. There are 7,000,000 shares of Series A Preferred Stock issued and outstanding as of . Unless otherwise noted, the address
for each beneficial owner listed below is c/o Ideanomics, Inc., at 1441 Broadway, Suite 5116, New York, NY 10018.
| |
|
Shares
beneficially owned |
|
|
| |
|
Common
Stock |
|
Series A
Preferred
Stock (9) |
|
|
| Name
and Address of Beneficial Owner |
|
Shares |
|
% |
|
Shares |
|
% |
|
%
of Total
Voting Power |
| Directors
and Named Executive Officers |
|
|
|
|
|
|
|
|
|
|
| Shane
McMahon (1) |
|
52,262 |
|
|
|
0 |
|
0 |
|
|
| Alfred
P. Poor (2) |
|
5,650 |
|
|
|
0 |
|
0 |
|
|
| James
S. Cassano (3) |
|
10,849 |
|
|
|
0 |
|
0 |
|
|
| Anthony
Sklar (4) |
|
15,200 |
|
|
|
0 |
|
0 |
|
|
| Scott
Morrison |
|
|
|
|
|
|
|
|
|
|
| Andrea
Hayward |
|
|
|
|
|
|
|
|
|
|
| Paul Hancock |
|
|
|
|
|
|
|
|
|
|
Shares
of. Series A Preferred- subject to proxy (5)(6) |
|
0 |
|
|
|
7,000,000 |
|
100 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| All
Current Directors and Executive Officers, as a group (6 individuals) |
|
73,958 |
|
|
|
7,000,000 |
|
100 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Five
Percent Holders |
|
|
|
|
|
|
|
|
|
|
| * | Represents beneficial
ownership of less than 1%. |
| (1) | Includes
(i) 43,745 shares of Common Stock, (ii) 3,911 shares of Common Stock underlying options exercisable
within 60 days at $230 per share, (iii) 4,000 shares of Common Stock underlying options exercisable
within 60 days at $247.50 per share; (iv) 607 shares of Common Stock underlying options exercisable
within 60 days at $696.25 per share. |
| (2) | Includes
(i) 1,889,125 shares of Common Stock, (ii) 750,000 shares underlying options exercisable
within 60 days at $0.53 per share, (iii) 2,000,000 shares underlying options exercisable
within 60 days at $1.98 per share, and 1,166,666 shares underlying options exercisable within
60 days at $2.37 per share. |
| (3) | Includes
(i) 4,075 shares of Common Stock, (ii) 95 shares underlying options exercisable within 60
days at $230 per share, (iii) 72 shares underlying options exercisable within 60 days at
$363.75 per share, (iv)607 shares underlying options exercisable within 60 days at $696.25,
(v) 4,000 shares underlying options exercisable within 60 days at $247.5 per shares, and
(vi) 2,000 shares underlying options exercisable with 60 days at $66.25 per share. |
| (4) | Includes
(i) 4,000 shares of Common Stock, (ii) 2,000 shares underlying options exercisable within
60 days at $247.50, (iii) 5,200 shares underlying options exercisable within 60 days at $66.25
per share, and (iv) 4,000 shares underlying options exercisable within 60 days at $296.25
per share. |
| (5) | Consists
of 7,000,000 shares of Series A Preferred Stock beneficially owned by the company’s
previous Chairman, Dr. Bruno Wu, who exited the the company on Dec 31, 2021. Except under
limited circumstances, our Board of Directors holds an irrevocable proxy, pursuant to shareholders
agreement between the Company and certain shareholders parties thereto. The shareholders
parties thereto dated as of December 29, 2021. We are not affiliated with Dr. Wu or any other
person and we do not believe that the parties to the shareholders agreement constitute a
“group” under Section 13 of the Securities Exchange Act of 1934, as amended,
as our Board exercises voting control over these shares. |
| (6) | 7,000,000
shares of Company Series A Preferred Stock, $0.001 par value, are convertible into 7,466
shares of Common Stock. Each holder of Series A Preferred Stock shall be entitled to ten
(10) votes for each one (1) share of Common Stock that is issuable upon conversion of a share
of Series A Preferred Stock held at the record date for determination of the stockholders
entitled to vote. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE
Review and Approval of Related Party
Transactions
We
have adopted a written policy with respect to the review, approval and ratification of related person transactions. The Audit Committee
has primary responsibility for reviewing all related party transactions involving the Company’s directors, officers and directors’
and officers’ immediate family members. The Board may determine to permit or prohibit the Related Party Transaction. For any ongoing
relationships, the Board shall annually review and assess the relationships with the Related Party and whether the Related Party Transaction
should continue.
Under
the policy, a “related party transaction” means any transaction directly or indirectly involving any Related Party that would
need to be disclosed under Item 404 of Regulation S-K. Under Item 404, the Company is required to disclose any transaction occurring
since the beginning of the Company’s last fiscal year, or any currently proposed transaction, in which the Company was or is
a participant and the amount involved exceeds $120,000, and in which any related party had or will have a direct or indirect material
interest. “Related Party Transaction” also includes any material amendment or modification to an existing Related Party Transaction.
For the purposes of this policy, a “Related Party” means (A) a director, including any director nominee, (B) an
executive officer; (C) a person known by the Company to be the beneficial owner of more than 5% of the Company’s common stock;
or (D) a person known by the Company to be an immediate family member of any of the foregoing. “Immediate family member”
means a child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
or sister-in-law of such director, executive officer, nominee for director, or beneficial owner, and any person (other than a tenant or
employee) sharing the household of such director, executive officer, nominee for director, or beneficial owner.
The
following is a summary of transactions since the beginning of the 2018 fiscal year, or any currently proposed transaction, in which
we were or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average
of our total assets at year-end for the last two completed years, and in which any related person had or will have a direct
or indirect material interest (other than compensation described under “Executive Compensation”). We believe the terms
obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable
to terms available or the amounts that would be paid or received, as applicable, in arm’s-length transactions.
Related Party Transactions with Tillou
Management and Consulting LLC
Effective
on December 13, 2022, the Company promised to pay to the order of Tillou Management and Consulting LLC, a New Jersey Limited Liability
Company (the “Noteholder”), an entity controlled by Vince McMahon, the father of the Company’s Executive Chairman, the
principal amount of $2,000,000 (the “Loan”), together with all accrued interest thereon, as provided in the promissory note
entered into between the Company and the Noteholder dated as of the Effective Date (the “Note”).
Except
as set forth in our discussion above, none of our directors or executive officers has been involved in any transactions with us or any
of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations
of the SEC.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
FOR 2023
Stockholder proposals
that are intended to be presented by such stockholders at our 2023 Annual Meeting of Stockholders must be received by our Corporate
Secretary at our principal executive offices no later than 120 calendar days in advance of the one year anniversary of the date that
our proxy statement was released to stockholders in order to be considered for inclusion in the proxy statement and form of
proxy/voting instruction card relating to that meeting pursuant to Rule 14a-8 under the Exchange Act. Under the rules of
the SEC, stockholders who wish to submit proposals for inclusion in the Proxy Statement for the 2023 Annual Meeting of Stockholders
must submit such proposals to Ideanomics by.
OTHER MATTERS
Our Board knows of no other
matters to be submitted to the Annual Meeting. If any other matters properly come before the Annual Meeting, then the persons named in
the enclosed form of proxy will vote the shares they represent in their discretion.
The SEC has adopted rules that
permit companies and intermediaries (e.g., brokers, banks, and nominees) to satisfy the delivery requirements for proxy statements and
annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement and annual report
addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience
for stockholders and cost savings for companies and intermediaries.
This year, a number of brokers,
banks, and nominees with account holders who are our stockholders may be householding our proxy materials. In such circumstances, a single
proxy statement will be delivered to multiple stockholders sharing an address unless contrary instructions have been received by the broker,
bank, or nominee from one or more of the affected stockholders. We have not initiated householding with respect to the small number of
our record holders because such householding would increase our costs. If, at any time, you would like to receive a separate copy of our
proxy statement and annual report, we will promptly send you an additional copy upon written or oral request directed to our Secretary.
If you are a beneficial owner, you can request additional copies of the proxy statement and the Annual Report. If your shares are held
in “street name,” you can request a change in your householding status by notifying your broker, bank, or nominee.
To the extent that this Proxy
Statement is incorporated by reference into any other filing by us under the Securities Act or the Exchange Act, the section of this Proxy
Statement entitled “Audit Committee Report” (to the extent permitted by the rules of the SEC) will not be deemed incorporated
unless specifically provided otherwise in such filing.
The final results of the
balloting at the Annual Meeting will appear in our Current Report on Form 8-K within four business days of the Annual Meeting.
Appendix A
Appendix B
Ideanomics (NASDAQ:IDEX)
Historical Stock Chart
Von Apr 2024 bis Mai 2024
Ideanomics (NASDAQ:IDEX)
Historical Stock Chart
Von Mai 2023 bis Mai 2024
